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NEW    FALLACIES    OF    MIDAS 


NEW   FALLACIES   OF 

MIDAS 

e^  SUIiVEY    OF    INDUStliJAL 
^ND    ECONOMIC    PROBLEMS 


BY 

CYRIL    E.    ROBINSON. 

Wuh  an  Introduction  by 
SIR  GEORGE  PAISH. 


NEW  YORK 
ROBERT    M.     McBRIDE    &    COMPANY 

1919. 


^ 


^  V^ssnri. 


PREFACE 

Books  on  Political  Economy  increase  and  multiply. 
They  are  a  natural  by-product  of  the  war,  which  has 
caused  all  classes  to  take  stock  afresh  of  their  economic 
destiny  ;  nor  is  it  much  wonder,  when  all  is  topsy-turvy, 
that  a  new  diagnosis  should  be  drawn  and  a  new  remedy 
prescribed  by  half-a-dozen  authors  in  each  week. 

But,  while  the  demand  for  economic  literature  is 
great,  and  the  supply  keeps  pace  with  the  demand, 
there  still  perhaps  lacks  something.  Amid  all  the 
maze  of  argument  and  theory,  the  puzzled  layman 
needs  some  guide  :  yet  there  is  no  one  book  to  give 
him  precisely  what  he  wants.  We  have  excellent 
manuals,  wide  in  scope,  strict  in  method,  scientific 
in  approach  :  but  too  often  the  manual  makes  dull 
reading  ;  its  language  is  academic,  overweighted  with 
a  jargon  of  technicalities  and  abstract  definition. 
It  may  be  true  that  Socialism  is  "  a  coercive  co-opera- 
tion, not  merely  for  undertakings  of  a  monopolisitic 
nature,  but  for  all  important  productive  enterprises  "  ; 
but,  however  true  the  words,  the  mind  is  apt  to  falter 
at  such  formal  logic  ;  and  the  very  need  for  a  thorough 
exposition,  which  will  press  analysis  to  its  extreme, 
must  yet  serve  to  blunt  the  writer's  own  enthusiasm 
and  leave  the  reader  cold.  The  manual,  with  the  best 
will  in  the  world,  can  seldom  touch  the  matter  into 
life. 


1512753 


PREFACE 

There  is  another  class  of  book,  aiming  at  a  different 
goal — I  mean  the  monograph  which  isolates  some 
single  phase  or  aspect  of  the  science,  or  the  pamphlet 
written  to  propagate  some  theorist's  special  creed. 
Such,  for  instance,  is  Mr.  Ramsay  Macdonald's 
"  Socialism  "  ;  and  such  again  is  Mr.  Belloc's  "  Servile 
State."  From  the  manual's  inevitable  failing  these 
are  free.  Tiiey  must,  at  all  costs,  interest  and  con- 
vince :  it  is  the  first  condition  of  success.  Yet  for 
that  very  reason  these  too  will  often  fail  to  satisfy  the 
reader.  They  preach  indeed  :  but  are  at  little  pains 
to  criticise  the  sermon.  They  assume  the  best  or 
prophesy  the  worst  :  yet  leave  the  reverse  of  the  picture 
too  much  dark.  Such  books,  too,  are  of  their  very 
nature  selective  and  incomplete  :  behind  their  argu- 
ments lie  many  issues  boldly  ignored  and  assumptions 
unexplained.  They  have  not  space  for  everything  : 
the  problems  of  production,  the  ethics  of  exchange,  the 
safe  limits  ol  monopoly,  and  the  natural  interaction 
of  supply  upon  demand,  how  wealth  is  to  be  got  before 
it  can  be  divided,  or  how  divided  under  other  rival 
schemes — all  this  can  be  but  lightly  touched,  if 
touched  at  all :  yet  all  this  the  interested  reader  must, 
as  he  thinks  things  out,  desire  to  know.  There  is  a 
gap  in  the  evidence  ;  his  judgment  of  the  case  is 
insecure  ;  and  he  will  be  thrown  back  upon  the  manual 
after  all. 

To  imitate  the  virtues  and  escape  the  short-comings 
of  both  types  is  the  chief  effort  of  this  book.  It 
makes  no  pretence  to  cover  all  the  ground  ;  but  it 
covers  much.  Theories  are  not  advanced  uncritically  : 
but  each  shall  at  least  receive  a  favourable  hearing, 
before  it  is  rejected.     Rather  than  leave  the  funda- 


PREFACE 

mental  issues  doubtful,  I  have  begun  at  the  beginning  : 
and  there  can  be  no  making  matters  clear  without 
some  monotony  of  formal  spade-work  and  abstract 
definition  ;  yet  I  have  tried,  so  far  as  may  be,  to  avoid 
the  use  of  academic  phrasing  or  mechanical  expression. 

Nor  have  I  wished  to  lose  from  sight  those  ethical 
and  political  values,  which,  though  they  are  not 
strictly  economic,  were  far  too  often  neglected  by  the 
early  economists.  I  have  tried  to  foresee  the  conditions 
upon  which  man's  happiness  must  be  built,  as  well  as 
the  methods  whereby  his  wealth  is  to  be  got.  To  be 
content  with  cold  analysis  is  to-day  impossible  : 
the  problems  are  too  vital  :  and,  though  all  prophecy 
is  dangerous,  we  must  needs  anticipate  some  practical 
solution.  We  must  confront  the  future  in  the  strength 
of  some  reasoned  faith. 

\\'ithout  the  advice  and  guidance  of  Sir  George  Paish, 
the  undertaking  must  have  been  far  less  ambitious. 
His  kindness  in  writing  the  introductory  chapter  has 
placed  me  very  much  in  debt  :  but  it  is  perhaps  the 
least  of  the  debts  I  owe  him.  My  special  thanks  are 
also  due  to  Mr.  A.  E.  Zimmern  for  his  helpful  revision 
of  the  chapters. 


CONTENTS 

CHAPTER  PAGE 

Introduction  by  Sir  George  Paish.  -        -  xi 
PART  I. 

I.      THE  FALLACY  OF  MIDAS             ...          -  7 

II.      WORK                 12 

III.  CAPITAL            -          -          --          -           -          -  24 

IV.  THE  PARADOX  OF  PROGRESS                -          -          -  32 
V.      LUXURIES   AND   NECESSITIES                -           - -•         -  39 

VI.      EXTRAVAGANCE  AND  WASTE                -          -          -  47 

VII.     UTOPIA 59 

PART  IL 

VIII.      VALUE 79 

IX.      MONOPOLY                   -._---  90 

X.      THE   POWER   OF  CAPITAL             -                       -           -  T02 

XI.      THE  PROTEST  OF  RUSKIN                         _           -           -  II6 

XII.      THE  RISE  OF  LABOUR                    ....  132 

XIII.  SOCIALISM                    _.-..-  156 

XIV.  FALSE  SOCIALISM  OR  THE  SERVILE  STATE              -  183 
XV.      SYNDICALISM  OLD  AND  NEW                -          _          -  197 

XVI.      THE  RIGHTS  OF  THE  INDIVIDUAL                   -           -  210 

XVII.      COMPROMISE               ------  234 

XVIII.      THE  NEW  FALLACIES  OF  MIDAS                      -           -  268 


INTRODUCTION  BY  SIR  GEORGE    PAISH 

Of  the  many  objects  for  which  this  war  was  begun  it  is 
now  beyond  question  that  the  main  one  was  the  pre- 
servation of  mihtary  autocracy  in  Germany  and  in 
Austria.  It  is  now  equally  evident  that  of  the  many 
consequences  of  the  war  the  chief  one  will  be  the 
emancipation  of  democracy,  not  merely  in  Germany, 
in  Austria  and  in  Russia,  but   throughout   the   world. 

In  Russia,  where  events  have  moved  faster  than 
elsewhere,  revolution  is  already  well  on  its  way  to  its 
final  stages.  It  is  true  that  so  far  a  bureaucratic 
autocracy  appears  to  have  been  merely  replaced  by 
an  oligarchy.  Nevertheless  the  eventual  introduction 
of  democratic  government  is  not  much  in  doubt,  and 
it  is  probable  that  the  people  of  Russia  will  for  the 
future  control  their  own  destinies  by  means  of  small 
republics  for  local  matters  and  of  a  federal  republic  for 
national  and  international  affairs. 

In  the  Austrian  Empire  revolution  and  dissolution 
have  taken  place  already,  and  probably  somewhat 
similar  conditions  to  those  prevailing  in  Russia  will  be 
witnessed  both  in  Austria  and  in  Hungary  in  the  early 
future.  Small  local  republics  are  likely  to  be  formed, 
and  eventually  some  kind  of  federal  republic,  including 
the  greater  part  of  the  existing  Austrian  Empire 
together  with  some  of  the  Balkan  States,  will  probably 
emerge  from  the  chaos. 

In  Germany  the  revolutionary  movement  towards 
democracy  is  causing  great  uneasiness  to  the  enemy 
government,  and  there  are  strong  reasons  for  expecting 
that  before  many  days  pass  by  the  militarist  autocracy 

zi. 


xii.  INTRODUCTION 

of  Germany  will  be  forced,  to  yield  place  to  a  democratic 
republic. 

The  nemesis  now  falling  upon  the  rulers  of  Germany 
and  of  Austria,  as  well  as  upon  the  classes  that  have 
supported  autocratic  and  military  domination,  will 
be  an  object  lesson  which  cannot  fail  to  be  understood 
by  the  rest  of  the  world,  and  even  in  countries  already 
democratic  a  greatly  increased  measure  of  democratic 
freedom  and  of  democratic  power  must  result  from 
the  revolutions  now  casting  their  shadows  in  front  of 
them  over  the  enemy  states. 

Already  some  uneasiness  exists  as  to  the  effect  upon 
progress  and  upon  civilisation  of  the  emancipation  of 
the  peoples  from  the  domination  ot  one  kind  or 
another  to  which  they  have  hitherto  been  subjected 
in  greater  or  in  lesser  degree  in  all  countries.  At 
such  a  moment  it  is  essential  for  everyone  to  recognise 
that  the  increased  freedom  of  democracy  in  the 
western  world  in  modern  times  has  brought  with  it  not 
injury  but  advantage  to  the  general  well-being  of  the 
world,  and  that  in  democratic  countries  law  is  more 
universally  respected  and  more  equitably  administered 
than  in  autocratic  states,  while,  on  the  whole,  order 
is  better  maintained. 

In  periods  of  transition  disorder  cannot  always  be 
avoided,  but  as  soon  as  public  opinion  becomes  con- 
vinced about  the  right  course  to  pursue,  and  democracies 
mobilise  their  power,  there  is  far  less  danger  of  disturb- 
ance and  of  any  breach  of  law  in  the  democratic 
countries  than  in  autocratic  states,  where  the  interests 
of  the  people  and  of  their  rulers  are  divergent.  There- 
for, after  the  period  of  transition  that  must  inevitably 
follow     upon     the     conclusion     of     peace,    in    which 


r^ 


INTRODUCTION  xiii. 

the  autocratic  nations  will  become  democratic  and  the 
democratic  nations  more  democratic,  there  will  be 
less  danger  of  disorder  throughout  the  world  than  there 
has  been  hitherto.  For  all  practical  purposes  the 
danger  of  democratic  nations  acting  unjustly  or 
faOing  to  maintain  order  and  respect  for  law  or  refusing 
to  honour  their  obligations  may  be  completely  dis- 
regarded. The  rise  of  democracy  means  a  high 
standard  of  honour,  the  recognition  of  justice,  the  / 
observance  of  law  and  greater  security,  both  for  life  and 
for  property. 

At  no  time  did  the  credit  of  Republican  France  stand 
higher  than  it  did  before  the  war ;  at  no  time  has  France 
been  more  highly  respected  or  more  fully  trusted  than 
at  the  present  moment,  and  no  one  doubts  her  intention 
or  her  ability  to  honour  the  great  debt  she  has  incurred 
in  waging  this  life  and  death  struggle  for  democracy 
against  autocracy,  or  to  act  justly,  indeed,  mercifully, 
not  only  towards  all  sections  of  her  own  people,  but 
towards  all  other  nations  which  desire  and  intend  to 
Uve  in  harmon}^  and  in  friendship  with  her,  and  to 
observe  those  principles  of  freedom,  equality  and 
brotherhood  which  are  the  glory  of  modern  France. 

Again,  democratic  America,  which  is  th^^^yeatest 
marvel  of  modern  times,  reveals  clearly  the  increasingly 
high  standards  of  conduct  demanded  by  democracies. 
The  credit  of  no  country  was  higher  than  that  of 
America  before  the  war,  or  will  be  higher  after  the  war, 
and  in  no  country  was  education  more  highly  appre- 
ciated, was  there  a  greater  love  of  justice,  greater 
sympathy  for  the  oppressed  and  the  unfortunate, 
greater  equality  of  opportunity  and  of  self-realisation, 
a  higher  measure  of  individual  happiness,  or  a  greater 


xiv.  INTRODUCTION 

rate  of  improvement  in  individual  and  national  well- 
being. 

It  is  unnecessary  to  speak  of  the  place  that  demo- 
cratic Britain  holds  in  the  family  of  nations.  It  is 
sufficient  to  point  to  the  policy  which  the  British  nation 
has  pursued  since  the  passage  of  the  great  Reform  Bill, 
of  promoting  her  own  well-being  by  contributing  to 
the  well-being  of  all  the  world,  and  to  the  manner  in 
which  her  sons  and  her  daughters  wherever  they  were 
placed,  at  home,  in  the  colonies,  and  abroad,  voluntarily 
came  forward  to  defend  the  principles  of  freedom  and 
of  justice,  which  are  dearer  to  them  than  life  itself,  by 
placing  all  that  was  theirs  at  the  service  of  democracy 
in  the  struggle  in  which  it  is  still  engaged. 

Thus  not  theory  but  experience  of  democracy  proves 
that  the  democratic  spirit  is  not  destructive,  but  con- 
structive, not  law  breaking  but  law  abiding,  not  less 
but  more  just  than  the  spirit  of  autocracy,  not  wishful 
to  dominate  but  to  give  freedom,  not  less  but  more 
desirous  of  creating  high  standards  of  honour  and  of 
duty.  And  with  this  experience  upon  which  to  base 
our  judgment  are  there  any  reasonable  grounds  for 
anxiety  as  to  the  future  when  the  democratic  spirit 
shall  be  more  widely  prevalent  ?  Rather  are  there  not 
greater  and  stronger  reasons  for  hopefulness  as  to  what 
the  future  has  in  store  for  all  nations,  and  more  es- 
pecially for  the  nations  in  which  the  democratic  spirit 
reaches  its  highest  development  ? 

In  the  turmoil  and  uncertainties  of  the  present 
situation,  when  society,  more  particularly  in  its 
political  and  economic  aspects,  is  in  process  of  complete 
reconstruction,  not  merely  in  one  or  two  countries  but 
in  all  countries,  it  is  of    the   highest    importance    to 


INTRODUCTION  xv. 

observe  certain  elementar\^  and  primary  truths,  in 
order  that  the  new  structure  may  be  erected  upon  such 
soHd  foundations,  and  so  strongly  built,  as  to  leave  no 
doubt  as  to  its  permanence,  its  utility  and  its  com- 
prehensiveness. 

The  first  of  these  truths  is  that  the  structure  of 
society  in  each  nation  as  well  as  of  the  whole  world, 
whether  upon  its  political  side  or  its  economic,  or  its 
social,  or  its  religious,  must  be  based  upon  the  character 
of  each  nation,  for  just  as  character  inevitably  governs 
the  aspirations,  the  activities,  and  the  attainments  of 
individuals,  in  the  same  manner  national  character 
must  govern  the  structure  of  nations. 

The  second  of  these  truths  is  that  the  structure  of 
society  in  each  nation  cannot  be  much  in  advance  of  the 
mental    and    spiritual    development    of    the     average 
individual,  and  that  no  nation  can  rise  to  the  level  of  its  ■■ 
possibilities  until  the  individual  is  both  educated  and  ■ 
enhghtened. 

The  third  is  that  the  economic  possibilities  of  a  nation 
in  these  days  of  international  intercourse  and  of  inter- 
national transit  are  governed  not  so  much  by  its  own 
natural  resources  as  by  the  mentality  and  character 
of  its  people. 

And  the  last  is  that  in  a  world  of  nations  firmly  bound 
together  by  democratic  principle  every  nation  would 
not  only  have  world  wide  markets  for  its  productions, 
but  would  be  assisted  to  produce  all  that  its  natural 
resources  permit  it  to  produce  or  the  intelligence  and 
skill  of  its  peoples  render  it  capable  of  manufacturing. 
The  limits  hitherto  placed  both  upon  consuming  power 
and  upon  production  would  therefore  disappear,  and 
the  measure  of  well-being  in  each  nation  would  accord 


xvi.  INTRODUCTION 

with  its  intelligence,  its  knowledge  and  its  energy. 
The  possibilities  of  national  and  of  international  well- 
being  would  thus  be  limitless. 

By  observing  these  fundamental  matters  it  is  not 
difficult  to  discover  the  course  which  the  various 
nations  are  hkely  to  pursue  in  a  democratic  world  in 
which  both  individuals  and  nations  will  enjoy  much 
greater  freedom  for  their  activities  than  hitherto,  sub- 
ject only  to  the  principles  of  friendship  and  of  co-oper- 
tion  which  will  cause  them  to  seek  to  promote  their 
own  well-being  by  contributing  to  the  general  welfare 
instead  of  seeking  advantage  at  the  expense  of  others. 

Thus  the  great  mass  of  the  Russian  people  are 
imaginative,  ideaUstic,  and  benevolent,  but  at  present 
they  are  uneducated,  ill-informed  and  therefore 
unpractical.  At  the  same  time  the  natural  riches  of 
Russia  are  unhmited,  and  when  the  Russian  people  are 
educated,  better  informed  and  more  practical  Russia 
is  likely  to  become  one  of  the  richest,  if  not  the  richest 
nation  in  the  world,  not  even  excepting  the  United 
States. 

The  present  character  of  the  Russian  people  and  their 
present  development  make  them  specially  fitted  for 
agricultural  pursuits,  but  render  them  unsuitable  for 
occupations  demanding  a  high  measure  of  concentra- 
tion and  of  business  capacity.  Their  childUkeness 
and  lack  of  knowledge  render  them  incapable  of 
initiative  and  of  independent  judgment,  and  conse- 
quently they  are  accustomed  to  communal  co-operation 
and  to  state  assistance  and  control.  In  this  mental 
condition  the  freedom  they  will  now  enjoy  will  doubt- 
less cause  them  to  make  communal  production  and 
trading  still  more  comprehensive.     Further,  with  the 


INTRODUCTION  xvii. 

disappearance  of  the  nobles  they  will  probably  demand 
a  greater  measure  of  assistance  from  the  State  in 
obtaining  the  additional  machinery  they  wiU  need  to 
expand  their  productions,  as  well  as  in  the  work  of 
transporting  their  produce  at  home  and  abroad.  The 
economic  system  of  Russia  for  some  time  to  come  must 
necessarily  be  a  combination  of  Communism  and  of 
State  Socialism. 

In  Germany  and  Austria  also  the  environment  in 
which  the  great  mass  of  the  people  have  hitherto  been 
placed  renders  them  quite  incapable  of  thinking  for 
themselves,  and  inasmuch  as  everyone  has  so  long 
been  accustomed  to  rely  upon  the  State  in  all  matters, 
the  German  as  w^ell  as  the  other  peoples  of  the  two 
countries,  even  when  they  completely  control  and  are 
responsible  for  their  own  governments,  will  still  necess- 
arily continue  to  need  the  help  of  the  State.  Hence, 
for  a  time  at  any  rate,  any  government  that  may  be 
set  up,  whether  it  be  a  limited  monarchy,  or  as  seems 
most  probable,  a  republic,  will  be  compelled  by  force 
of  circumstances  to  pursue  a  policy  of  State  Socialism 
of  the  purest  description. 

On  the  other  hand  the  French  people  are  accustomed 
to  individual  thought  and  initiative,  and  desire  great 
individual  freedom,  not  only  in  agriculture  but  in 
industry.  Consequently,  there  is  a  general  disposition 
shown  by  workmen  to  adopt  co-operative  methods  of 
manufacture  rather  than  to  continue  to  be  employed 
by  individual  capitalists.  This  disposition  is  due  to 
their  desire  for  a  voice  in  controlling  their  own  lives, 
as  well  as  to  their  wish  to  participate  in  greater  measure 
in  the  profits  of  industry.  The  character  of  the  French 
people  thus  points  to  an  individualistic  economic  policy, 


xviii.  INTRODUCTION 

in  so  far  as  it  is  of  advantage  to  the  average  citizen,  and 
to  what  is  known  as  SyndicaUsm,  or  Guild  SociaUsm, 
when  industries  must  be  carried  on  by  large  numbers  of 
persons  working  in  co-operation. 

In  brief,  whereas  in  Russia,  Germany  and  Austria, 
the  people  will  gain  a  much  larger  measure  of  freedom 
by  setting  up  democratic  governments  and  imposing 
upon  them  still  more  comprehensive  duties  than  were 
performed,  even  by  the  autocratic  governments  they 
will  supersede,  in  France  a  greater  measure  of  indi- 
vidual responsibility  for  the  great  mass  of  the  people 
in  the  conduct  of  industry,  will  carry  the  nation  along 
the  path  leading  to  individual  liberty. 

In  the  United  States,  the  workers  generally  are  in 
favour  of  individualistic  effort,  but  are  opposed  to  the 
control  of  industries  by  a  few  persons  of  great  wealth 
and  of  great  power.  Therefore,  in  America  as  in 
France,  the  character  of  the  nation  and  the  course  of 
events  seem  to  lead  to  the  control  of  industry  by  the 
workers.  Hitherto  labour,  both  manual  and  pro- 
fessional, has  been  hired  by  capital  at  the  remunera- 
tive rates  current  in  that  country.  In  the  future  it  is 
likely  that  manual  labour,  allied  with  professional  skill, 
will  hire  capital  at  the  remunerative  rates  which  capital 
in  such  a  wealthy  country  as  America  will  always  be 
able  to  command.  The  application  of  this  principle 
is  already  very  far  advanced  in  such  undertakings  as 
railways,  where  public  opinion  is  averse  to  the  payment 
of  higher  dividends  than  needed  to  permit  new  capital 
to  be  raised  as  required,  where  policy  is  controlled  by  the 
staff,  and  where  the  rate  of  remuneration  to  the 
employees  is  as  high  as  the  public  considers  just  or  is 
willing  to  approve. 


INTRODUCTION  xix. 

The  British  people  are  essentially  independent  and 
individualistic,  they  hate  authority  and  dislike  control, 
unless  self-created  and  self-imposed.  Their  most 
pronounced  characteristic,  and  their  greatest  asset,  is  a 
fund  of  what  is  generally  described  as  common  sense 
and  a  sense  of  proportion,  and  they  prefer  to  judge  each 
question  on  its  merits,  when  they  are  compelled  by  force 
of  circumstances  to  come  to  a  decision,  rather  than 
allow  their  decision  to  be  governed  by  theoretical 
considerations  alone.  When  they  have  the  choice  of 
two  policies  they  usually  follow  the  one  which  promises 
to  give  the  best  results,  however  hazardous  it  may  be, 
and  are  quick  to  follow  a  leader  who  shows  boldness 
and  enterprise,  combined  with  practical  wisdom. 
Their  love  of  adventure  has  not  only  made  them  a 
sea-faring  nation  but  has  led  them  to  take  chances  of 
all  kinds.  Hence  they  have  been  for  many  years  and 
still  are  the  most  enterprising  of  all  the  nations.  The 
activities  of  their  bankers,  manufacturers,  merchants, 
shipowners,  under-writers,  contractors  and  producers 
generally,  are  world-wide,  while  their  investors  are 
interested  in  almost  every  great  enterprise  wherever 
it  may  be  situated,  from  the  North  to  the  South  Pole. 

In  the  work  which  these  few  notes  will  introduce  to 
the  reader  Mr.  Robinson  gives  a  valuable,  an  instruc- 
tive and  an  impartial  survey  of  the  trend  of  economic 
thought  and  of  economic  policy  in  modern  times,  and 
in  his  concluding  chapters  he  deals  faithfully  with  the 
questions  of  Socialism,  Syndicalism  or  Guild  Socialism 
and  Individualism.  These  chapters  necessarily  reflect 
anxiety  as  to  the  economic  policy  which  this  country 
may  pursue  when  the  spirit  of  democracy  is  as  prevalent 
and  as  highly  developed  as  it  is  likely  to  be  after  the  war. 


XX.  INTRODUCTION 

Analysis  of  the  British  character  and  disposition, 
however,  should  dispel  any  uneasiness  or  anxiety  as  to 
the  course  which  the  British  nation  will  take  when  peace 
is  restored.  The  qualities  that  have  made  the  British 
nation  what  it  is  have  not  been  destroyed  by  the  war, 
rather  have  they  become  strengthened.  To  bear 
successfully  and  easily  the  strain  of  a  great  war  in  the 
manner  the  British  people  have  borne  it  is  the  result 
not  of  the  war  but  of  the  character  the  people 
possessed  prior  to  the  war  and  of  the  policy  they  have 
pursued  during  the  last  two  generations,  in  which 
individual  freedom,  independence  and  responsibility 
have  grown  steadily  greater.  That  democracy  will  be 
freer  after  the  war  is  the  strongest  possible  testimony 
to  the  soundness  of  the  policy  which  democracy  has 
pursued  hitherto.  The  war  has  merely  brought 
British  democracy  nearer  the  goal  towards  which  it 
has  been  walking,  with  more  or  less  consistency,  for 
a  very  long  time. 

What,  then,  is  likely  to  be  the  economic  poUcy  of  this 
country  after  the  war,  when  democracy  will  have  much 
greater  power  than  it  has  had  hitherto  ? 

It  is  evident  that  democratic  policy  after  the  war 
will  not  differ  in  essentials  from  democratic  policy  prior 
to  the  war.  It  will  be  bolder,  bigger  and  more  con- 
fident, but  much  the  same  in  essentials.  For  many 
years  British  democracy  has  endorsed  the  principle 
that  the  State  should  perform  those  functions  it  is 
specially  fitted  to  perform,  and  which  other  organisa- 
tions could  not  accomplish  or  not  accomplish  so  well. 
The  State  includes,  of  course,  both  the  national  and 
local  authorities.  The  community  in  its  corporate 
capacity  l^as  undertaken  the  work  of  maintaining  the 


INTRODUCTION  xxi. 

roads,  of  collecting  and  delivering  letters,  of  producing 
and  distributing  gas,  water  and  electricity,  of  pro- 
viding a  telephone  service,  of  educating  the  children, 
and  of  performing  other  duties  which  it  could  perform 
with  great  advantage.  After  the  war  the  State  will 
probably  extend  its  activities  to  railway  transporta- 
tion, which  can  be  rendered  much  more  useful  and  of 
much  greater  value  by  unification,  to  insurance  of  the 
working  classes  against  all  the  misfortunes  to  which 
they  are  subjected,  including  unemployment  assur- 
ance for  all,  as  well  as  widowhood  insurance,  and 
to  a  number  of  other  things  which  urgently  need 
to  be  undertaken  by  the  State.  But  these  things 
will  not  be  undertaken  until  the  British  people  are 
convinced  that  such  a  course  is  in  the  general  interest 
and  the  proposal  to  undertake  them  does  not  warrant 
uneasiness. 

Again,  it  is  probable*that  the  principle  of  co-opera- 
tion, which  is  really  what  is  meant  by  Syndicalism  and 
Guild  Socialism,  when  the  latter  are  shorn  of  their 
sinister  attributes,  will  be  extended  from  distribution, 
insurance,  clubs  and  other  ventures  to  production. 

If  the  extension  of  co-operation  to  production  is 
successful  as  tinder  present  circumstances  it  is  likely  to 
be,  the  benefit  to  the  nation  will  be  very  great,  for  then 
the  workers  will  be  their  own  masters,  and  the  con- 
stantly arising  friction  between  capital  and  labour  will 
for  ever  disappear.  But  it  is  obvious  that  co-operative 
production  can  be  introduced  into  very  few  industries, 
at  any  rate  until  a  great  deal  of  experience  is  gained  of 
its  working.  Coal  mining  seems  to  be  the  one  industry 
adapted  to  the  new  departure  where  the  workers  are 
anxious   to   try   the   experiment.     Provided   that   the 


xxii.  INTRODUCTION 

miners  secure  the  capital  to  take  over  the  mines,  and 
do  not  attempt  to  obtain  them  by  violence,  nothing  but 
good  could  arise  from  the  mines  passing  into  the 
possession  of  the  workers  themselves,  who  not  only 
labour  under  such  unfavourable  conditions,  but  who 
daily  expose  their  lives  to  unknown  dangers  in  pursuing 
their  calling.  Of  course,  even  if  the  miners  wished  to 
confiscate  the  mines,  the  British  people  would  not 
sanction  confiscation,  as  such  a  course  is  entirely 
contrary  to  the  national  character.  The  British  people 
have  never  failed  to  pay  handsomely  for  any  property 
they  desired  to  acquire  for  national  or  other  purposes, 
and  there  is  less  likelihood  than  ever  of  their  doing  so 
in  future. 

And  after  the  industries  which  the  State  or  companies 
of  workmen  are  fitted  to  undertake  have  been  acquired, 
there  will  still  be  ample  room  for  all  the  private  enter- 
prise that  is  available,  especially  having  regard  to  the 
probability  that  the  greater  freedom  of  democracy  will 
cause  a  still  stronger  effort  to  be  made  to  raise  the 
universal  standard  of  comfort,  that  consequently 
demand  will  increase,  and  that  production  will  be 
correspondingly  stimulated. 

Thus  the  policy  of  the  British  nation  in  the  future, 
as  in  the  past,  is  likely  to  be  a  judicious  combination  of 
individualism,  co-operation  and  socialism,  with  the 
probability  that  the  effect  of  the  combination,  in  view 
of  the  greater  spirit  of  freedom  and  the  greater  know- 
ledge which  all  the  world  will  enjoy,  will  be  a  much 
greater  volume  of  production,  accompanied  by  a  much 
higher  level  of  consumption. 

In   brief   the   supremacy   of   democracy   which   will 
result  from   the   destruction   of   autocratic   militarism 


INTRODUCTION  xxiii. 

will  not  only  render  the  peace  of  the  world  much  more 
secure  than  hitherto,  but  as  soon  as  the  period  of 
transition  from  war  to  peace,  from  autocracy  to 
democracy,  is  passed  through,  it  will  bring  to  the  world  a 
degree  of  well-being  that  cannot  be  attained  unless 
men  and  women  labour  in  an  atmosphere  of  liberty, 
with  the  energy  of  hope  and  the  promptings  of 
affection. 

George  Paish. 

yih  November,  1918. 


Chapter   I 
THE  FALLACY  OF  MIDAS 

(i.) 

Once  long  ago  there  lived  in  Asia  Minor,  a  king  called 
Midas,  who  formed  an  economic  theory,  and  this 
since  he  was  a  special  favourite  of  the  Immortals  he  was 
permitted  to  carry  into  practice.  Like  many  other 
economic  theories,  it  might  have  looked  well  enough 
on  paper  ;  but  in  execution  it  was  a  terrible  fiasco. 
According  to  the  definition  of  wealth  which  this 
ingenious  monarch  had  proposed,  it  was  gold  alone 
which  counted,  and  according  to  that  definition  he 
saw  himself  a  made  man.  For  he  prayed  that 
everything  might  turn  to  gold  under  his  touch 
and  his  prayer  being  granted,  he  was  well  on  the  way 
to  become  a  millionaire  (for  a  quite  insignificant  ex- 
penditure of  trouble),  when  to  his  dismay  he  found 
himself  on  the  border  of  starvation.  Whatever  he 
drank,  were  it  wine  or  water,  turned  into  liquid 
gold  as  it  passed  his  lips  ;  if  he  tried  to  eat  his  teeth 
grated  upon  an  uncompromising  lump  of  metal.  There 
was  but  one  escape  from  his  dilemma,  and  that  was 
by  a  reversal  of  the  god's  decree  ;  and  had  it  not 
been  for  the  generosity  of  Olympus  he  would  have 
died  from  want  like  any  pauper.  His  whole  hypothesis 
concerning  wealth  had  broken  down. 

Mankind  is  slow  to  learn  whether  by  precept  or 
example  ;  so  the  moral  of  Midas'  misfortune  was 
largely  lost  upon  the  world.  Centuries  passed, 
and  in  the  course  of  history,  his  blunder  was  re- 
peated,  this  time  in  a  more  western   land,  and   not 


8  NEW  FALLACIES  OF  MIDAS 

by  a  king  alone,  but  by  a  king's  whole  people.  When 
the  voyages  of  Columbus  and  his  successors  revealed 
to  their  countrymen  the  fabulous  resources  of 
the  new  continent,  the  lust  of  gold  caught  them 
in  its  grip,  and  in  the  years  that  followed  the  more 
adventurous  spirits  among  them  were  busy  shipping 
gold  across  the  sea  to  the  treasuries  of  Spain. 
If  gold  was  a  true  index  of  national  prosperity  then 
Spain  was  prosperous ;  her  future  semed  assured. 
Yet  at  this  very  moment  her  decline  set  in  ;  and  not 
all  her  hoarded  wealth  was  sufficient  to  arrest  the  down- 
ward movement.  Were  the  England  of  to-morrow 
to  lose  her  maritime  ascendency,  or  were  she  by  political 
blundering  to  alienate  her  great  dominions,  she  would 
yet  retain  some  measure  of  her  prosperity  and  im- 
portance so  long  as  her  mines,  her  cotton  mills  and  her 
hard  ware  factories  remained  intact.  Spain  had  no 
such  resources  on  which  to  draw  ;  and  swiftly  enough 
she  sank  from  her  high  estate  into  penurious  degrada- 
tion. She  had  built  her  hopes  and  spent  her  energies 
upon  a  form  of  wealth  which  cannot  feed  the  hungry 
mouth,  or  clothe  the  naked  body,  a  form  of  wealth 
which,  of  its  very  nature,  can  never  make  a  people 
strong  or  wise  or  happy. 

We  to-day  are  little  likely  to  fall  victims  to  the 
illusion  which  cheated  Midas  and  ruined  Spain.  During 
these  last  years  of  war  we  have  learnt  to  dispense 
with  a  gold  currency ;  our  daily  business  has  been 
conducted  with  the  aid  of  flimsy  fragments  of  in- 
different paper  ;  and  the  veriest  fool  is  now  aware 
that  gold  is  no  more  than  a  convenient  medium  of 
exchange.  We  may  believe  financiers  when  they  tell 
us  that  gold  provides  a  "permanent  standard  of  values"; 
but  we  trouble  our  heads  very  little  about  such  things 
so  long  as  the  Government  printing  press  is  working 
and  public  confidence  is  sustained.  The  figures  of 
great  loans  have  taught  us  to  think  in  ciphers  and  not 


THE  FALLACY  OF  MIDAS  9 

in  coins  ;  we  begin  to  realise  something  of  the  elements 
of  world  finance,  and  the  mysterious  powers  of  credit. 
Nobody  now  would  gauge  our  national  prosperity  by 
counting  the  bullion  stored  up  in  the  national  banks. 
And  if  we  cannot  define  precisely  what  we  mean  by 
wealth,  we  can  at  least  quote  trade  statistics,  and 
strike  a  balance  between  the  total  values  of  exported 
and  imported  goods.  Yet  sooner  or  later  (if  we  are 
to  think  at  all  about  such  things),  we  must  face  the 
question  "  What  is  wealth  ?  "  and  answer  it  if  we  can. 
For  the  real  cause  of  Midas'  fiasco  and  Spain's  disaster 
lay  not  so  much  in  their  hurry  to  be  rich,  as  in  the 
mistaken  answer  which  they  gave  to  this  perplexing 
que-tion.  We  all  need  wealth  and  we  spend  the 
greater  part  of  our  waking  hours  in  the  endeavour 
to  obtain  it,  but  what  precisely  is  this  wealth  we  are 
seeking  we  seldom  trouble  to  enquire  ;  and  most  of  us 
would  find  it  hard  indeed  to  give  a  satisfactory  answer. 
Midas  said  gold ;  but  repented  at  leisure.  Others 
with  higher  wisdom  might  hazard  a  country  house, 
a  ?hooting  moor,  a  well-filled  stable  ;  but  that  would 
b'j.rdly  meet  the  notions  of  a  bibliophile  or  a  native 
from  Honolulu.  Tastes  differ  ;  and  any  attempt  to 
pin  all  mankind  to  some  such  arbitrary  choice,  would 
leave  half  the  world  as  miserable  as  Midas.  So  we 
had  best  seek  to  frame  no  concrete  definition  or 
we  shall  be  caught  in  some  fallacy  every  whit  as 
blundering  as  his. 

None  the  less,  whatever  wealth  may  be,  we  are 
all  agreed  that  wealth  is  what  we  need  ;  and  so,  I 
suppose,  it  would  be  true  to  say  that  wealth  is  that 
which  satisfies  our  needs.  Whatever  ministers  to  our 
bodies'  wants,  gives  pleasure  to  our  senses,  food  for 
our  minds,  or  comfort  in  our  homes,  all  this  is  wealth  ; 
not  the  outward  signs  of  material  well-being  only, 
food  and  drink,  houses  and  furniture,  finery  and 
trinkets  ;   but  no  less  the  view  of  a  mountain  side  seen 


10  NEW  FALLACIES  OF  MIDAS 

from  our  windows,  a  sermon  preached  to  us  in  church, 
a  song  written  to  beguile  our  idle  moments.  The 
nature ~of "wealth  varil^' from~day  to  day,  with  the 
variation  of  our  tastes  ;  should  ladies  of  fashion 
discover  next  season  some  unexpected  elegance  in 
mole  skin  muffs,  the  breeding  of  moles  would  become 
a  profitable  business,  and  a  mole-ridden  meadow  a 
treasure  rather  than  a  nuisance.  In  short,  anything 
which  men  or  women  find  useful  and  alluring,  is  a  part 
of  wealth,  and  even  though  their  desire  for  a  thing 
seems  foolish  or  pernicious  that  is  no  reason  for 
ruling  it  off  the  list.  If  clothes  are  wealth  because 
they  keep  us  warm  and  dry.  Dreadnoughts  and 
howitzers  are  wealth  also,  because  they  protect  us 
from  worse  things  than  wind  and  rain. 


(ii.) 

Nor,  when  we  come  to  consider  the  agents  and 
sources  of  our  wealth,  shall  we  omit  from  the  count 
those  many  things  which  in  themselves  are  detestable, 
or  at  least  unpleasant,  and  which  yet  contribute  in 
some  indirect  manner  to  the  satisfaction  of  our 
wants  ;  such  things  for  instance  as  mines  for  coal  or 
metal,  goods  trains,  paper  bags  and  the  manufacture 
of  chemical  manures.  Nobody  would  desire  any  of 
these  for  their  own  sakes  ;  but  if  I  am  to  enjoy  a 
plate  of  porridge,  every  one  of  them  will  play  its  part, 
great  or  small,  in  providing  that  trifling  satisfaction. 
Most  important  and  most  obvious  of  all  is  the  contri- 
bution of  the  soil  itself.  The  earth  is  the  original 
purveyor  of  all  our  wealth  ;  and  when  we  consider  the 
crops  she  grows,  the  animals  she  feeds,  the  metals  and 
chemicals  which  she  contains,  it  is  clear  how  little 
there  is  which  we  possess  or  enjoy  but  derives  its 
origin  from  her. 


THE  FALLACY  OF  MIDAS  ii 

But  for  all  these  things,  before  we  can  enjoy  them, 
Nature  demands  a  price,  a  toll  ;  and  this  too  (though 
here  perhaps  the  gods  were  equally  to  blame)  Midas 
had  forgotten.  The  earth  is  a  niggard  minister ; 
she  yields  us  what  we  ask,  but  ever  since  Adam  and 
Eve  walked  out  of  Eden,  she  has  yielded  it  only  on 
one  strict  condition  ;  we  must  work  for  it.  We  must 
sow,  reap,  dig,  build,  and  win  our  livelihood  gener- 
ally by  honest  sweat.  Metal  a  thousand  feet  below 
earth's  surface  is  no  more  wealth  to  us  than  the  lost 
mines  of  Solomon.  It  must  be  fetched  from  its  hiding- 
place,  molten  in  a  furnace,  beaten  into  shape  ;  not  till 
then  will  it  be  valuable  to  man.  As  without  the 
sculptor's  handiwork  the  marble  block  will  be  no 
statue,  so  without  labour  the  earth's  resources  cannot 
become  wealth.  Man  and  nature  have  entered  into 
partnership  to  supply  man's  wants.  Sometimes  there 
are  cases  when  one  or  the  other  seems  sleeping-partner 
in  the  business.  We  may  have  blackberries,  or  (in 
India)  bananas,  as  a  free  gift ;  or  a  man  sings  a  song, 
acts  a  play  or  delivers  a  lecture,  and  he  may  boast  to 
nature  that  he  has  satisfied  his  fellows  and  yet  done 
without  her.  Nevertheless,  in  however  small  degree, 
the  partnership  still  holds  valid.  The  blackberry 
must  at  least  be  picked  ;  the  singer  or  lecturer  must 
use  the  voice  which  nature  has  given  him.  Nature's 
part,  in  fine,  we  cannot  cancel  ;  we  can  only  endeavour 
to  control  her.  If  rains  fail  or  coal  mines  are  ex- 
hausted, we  must  accept  the  circumstance.  We  are 
answerable  for  our  part  and  for  that  only  ;  we  endea- 
vour to  extract  from  nature  what  we  can,  and  if 
at  this  advanced  stage  of  the  world's  history  the 
result  falls  short  of  our  requirements,  it  is  for  us  to  say 
whether  we  have  played  our  part  foolishly  or  wisely. 


Chapter  II 
WORK 

(i-) 

Man  then  accepts  work  first  of  all  as  a  necessity  of 
his  exis^tence,  not  as  a  moral  duty^""  This  truth  has 
often  b'een  riibsl;  strangely  and  wilfully  forgotten. 
There  are  many  well-meaning  persons  going  about 
the  world  whose  chief  anxiety  is  to  see  that  everyone 
else  is  doing  something.  When  trade  is  slack  and 
many  hands  are  idle,  those  people  talk  about  the 
"  right  to  work  "  ;  employment,  they  say,  must  some- 
how be  provided  ;  and  they  will  push  forward  schemes 
for  the  building  of  roads  which  nobody  will  ever  use, 
or  the  draining  of  fens  which  no  farmer  will  ever  till. 
Such  folk  are  always  much  scandalised  at  the  miner 
who  works  but  four  days  out  of  seven  ;  not  because 
they  want  more  coal,  but  because  it  gives  them  pain  to 
see  a  man  thus  unoccupied.  They  are  scandalised 
again  when  the  engineers  go  on  strike  for  shorter  hours 
though  they  themselves  have  never  worked  a 
twelve-hour  day  in  their  life.  At  one  time  they  may 
be  heard  defending  the  indulgence  of  some  private 
luxury  as  being  "  good  for  trade,  "  because,  that  is,  it 
it  gives  somebody  else  a  job  to  do  ;  at  another  they  are 
consoled  for  the  accident  of  a  broken  window  because 
it  gives  employment  to  the  plumber,  as  through  the 
plumber,  good  man,  would  not  have  been  just  as  well 
satisfied  had  they  spared  the  pane  and  sent  himhalf- 
a  crown  by  post.  But  that  would  never  do  ;  these 
good  folk  would  feel  there  was  a  something  lacking  ; 
they  wished  to  see  the  man  busy  with  his  foot  rule  and 

12 


WORK  13 

daubing  the  putty  with  his  thumbs.  They  have  no 
precise  reason  to  give  for  wishing  it  ;  they  do  not  say 
that  it  is  good  for  a  man  to  be  active;  for  in  that  case, 
they  would  first  take  the  trouble  to  enquire  how  the 
man's  leisure  hours  are  spent.  But  that  at  any  rate  is 
not  their  argument.  The  idea  that  has  captured  their 
minds  is  the  far  more  venturesome  hypothesis  ;  that 
the  plumber  wants  or  should  want  to  mend  windows, 
the  miner  to  dig  coal,  and  the  engineer  to  manufacture 
machinery,  for  the  work's  own  sake,  which  is  a  very 
different  matter. 

A  Chinese  writer  tells  the  story  of  a  tactful  mandarin 
who  at  the  close  of  a  long  and  honourable  career, 
retired  to  the  borders  of  a  lake,  where  he  spent  the  re- 
mainder of  his  days  in  angling  for  fish.  For  so  skilled 
a  man  his  sport  seemed  singularly  unproductive, 
till  one  fine  day  it  was  discovered  that  he  used 
no  hook  at  all  upon  his  line  ;  for  it  was  not,  it  seems, 
his  intention  to  catch  fish.  In  China  this  may  pass  for 
the  wisdom  of  a  philosopher  ;  but  we  should  call  it  the 
act  of  a  fool.  Here  in  Europe  there  is  a  strong  presump- 
tion that  if  men  angle,  they  angle  to  catch  fish,  and  upon 
the  same  sound  principle,  they  work,  if  they  work  at  all, 
in  the  expectation  of  reaping  some  return.  Labour,  in 
other  words,  is  a  means  to  some  end  beyond  itself.  First 
and  foremost  men  work  not  because  they  want  to,  but 
because  they  want  something  which  work  alone  can 
give. 

Yet  for  all  this,  many  men  love  their  work  ;  it  is  some- 
thing more  than  habit  or  sense  of  duty  which  keeps 
them  at  their  desk  or  at  their  bench  long  after  the 
actual  necessity  for  work  is  gone.  The  truth  is  that 
the  love  of  activity,  the  desire  to  be  up  and  doing 
is  far  stronger  in  our  nature  than  the  love  of  ease  and 
leisure.  Between  the  alternatives  of  action  and  in- 
action few  would  hesitate  in  their  choice  ;  least  of  all 
those  who  have  experienced   the  tedium   of  an  idle 


14  NEW  FALLACIES  OF  MIDAS 

life.  In  a  recent  book,  entitled  "  the  Great  Society," 
Mr.  Graham  Wallas  has  recorded  the  various  answers 
given  by  a  number  of  girls  and  women  to  whom  was  put 
the  question,  whether  work  brought  them  happiness. 
Almost  without  exception  they  asserted  that  it  did, 
and  the  reason  in  every  case  was  laid  upon  the  misery 
of  a  purposeless  existence.  "  It  is  so  lonesome  at 
home."  "  At  work  I  am  always  happy  ;  "  "it  leaves 
me  no  time  to  think  ;  "  or  "  it  is  nice  to  feel  you  are 
some  use."  All  their  answers  were  in  the  same  strain. 
Yet  by  a  curious  contrast  the  verdict  of  the  men  to 
whom  a  similar  question  had  been  put,  was  equally 
decisive,  but  in  the  opposite  direction.  "  Questioned 
with  regard  to  pleasure  in  work,  engineers  say  it  is 
all  toil.  They  admit  there  is  a  certain  pleasure  in 
a  job  well  done  ;  but  they  say  bad  conditions  knock 
the  pleasure  out.  Coal  miners  generally  say  the  work 
is  all  toil,  but  one  man  said  he  would  sooner  be  at  work 
than  idle  ;  another  that  he  can  take  pleasure  in  the 
work  for  half  a  day  when  he  knows  he  is  going  to  have 
a  half-holiday.  A  third  said  that  there  is  a  certain  pleas- 
ure in  digging  out  coal,  when  you  have  a  good  place  ; 
but  that  pleasure  is  just  in  the  expectation  of  making 
a  good  wage.  Factory  workers  {i.e. , textile,  bootmaking, 
etc.)  agreed  that  work  is  all  toil."  There  is  only  one 
exception,  "  Ashby,  our  agricultural  labourer,  is  very 
emphatic  with  regard  to  the  pleasure  to  be  obtained 
from  agricultural  work."  At  first  sight  the  contrast 
may  appear  puzzling  ;  but  the  explanation  is  not,  I 
fancy,  far  to  seek.  The  men  spoke  as  never  having 
known  what  it  was  to  lead  an  idle  life.  The  cause 
of  their  dissatisfaction  lay,  not  in  a  dislike  of  work, 
but  in  a  distaste  for  the  particular  kinds  of  work  which 
circumstances  compelled  them  to  perform.  A  doctor, 
a  scientist,  or  a  teacher  would  have  a  different  tale 
to  tell.  These  do  win  happiness  through  their  work, 
because    they    find  in  it   a   means  of  self-expression. 


WORK  15 

There  is  a  vital  energy  in  man  which  craves  an  outlet, 
ideas,  emotions,  inspirations,  which  demand  to  be 
translated  into  action  ;  and  we  must  believe  (unless 
we  are  to  despair  of  human  nature)  that  every  man, 
however  indolent  or  stupid,  has  some  hidden  talent, 
some  innate  capacity  which  it  gives  him  pleasure  to 
employ.  One,  may  be,  is  ready  with  his  hands,  and 
longs  to  gratify  the  instincts  of  a  craftsman  ;  another 
has  a  taste  for  the  sea,  and  delights  in  the  navigation 
of  a  boat  ;  a  third  loves  flowers  and  finds  happiness 
in  growing  them.  To  these  their  several  occupations 
echo  in  some  real  sense  the  inner  workings  of  their 
personality.  But  the  trouble  is  not  so  much  that 
the  wrong  men  find  their  way  into  the  wrong  pro- 
fessions, but  rather  that  the  great  majority  of  trades 
afford  men  no  such  opportunity  of  realising  their  true 
selves.  Most  of  the  talk  about  the  "blessedness" 
of  manual  labour  is  sheer  cant ;  if  those  who  use  that 
phrase  were  to  spend  twelve  months  in  digging  coal, 
or  laying  bricks,  or  ploughing  up  the  soil,  they  would 
soon  realise  that  in  such  tasks  of  unrelieved  monotony 
there  is  small  satisfaction  to  the  soul  of  man.  Ten 
hours  of  hoeing  in  a  field  of  turnips  may  be  good  moral 
discipline,  but  discipline  implies  preparation  for  some 
further  and  higher  purpose.  Soldiers  are  drilled 
that  they  may  keep  their  ranks  when  the  day  of  battle 
comes  ;  but  the  realisation  of  the  soldier's  self  comes 
not  in  the  drill,  but  in  the  victory.  So  the  drudgery 
which  turns  human  beings  into  unintelligent  machines, 
is  not  what  human  beings  themselves  desire,  or  should 
desire.  The  Greeks,  who  understood  life  better  perhaps 
than  most  modern  people,  were  quite  clear  upon  the 
point.  Aristotle  held  that  no  man  had  attained  the 
full  measure  of  his  human  birth-right  who  spent  three- 
quarters  of  his  day  and  all  his  energies  upon  purely 
manual  labour.  In  the  past  the  life-work  of  more 
than  half  the  world's  inhabitants  has  been  as  soulless 


\ 


i6  NEW  FALLACIES  OF  MIDAS 


as  the  labour  of  a  well-kept  horse.  Even  to-day  how 
much  of  human  toil  is  still  mere  drudgery,  death  to 
the  spirit  and  weariness  to  the  flesh.  Man  has  hitherto 
endured  the  yoke,  not  because  he  loves  such  toil, 
but  because  he  is  under  compulsion  to  secure  his 
daily  bread.  And  therefore  throughout  the  ages,  it 
has  been  his  constant  effort,  as  it  still  is,  to  mitigate 
the  severity  of  his  necessary  toil. 


(ii.) 

Man  differs  from  the  rest  of  the  members  of  the 
animal  kingdom  in  this,  that  while  their  destiny  is 
shaped  by  something  other  than  their  individual  choice, 
he,  being  master  of  his  fate,  discerns  the  alternative 
courses  which  lie  before  him  and  chooses. 

Some  animals  are  by  nature  idle  ;  the  cow  does 
nothing  for  its  fodder  :  but  lives  by  browsing.  Others, 
like  the  bee,  work  with  a  restless  industry  which  kills 
them  in  a  month.  The  two  types  are  poles  asunder, 
with  not  a  point  in  common  ;  yet  here  is  a  man  setting 
out  with  a  fine  audacity  to  emulate  them  both.  Want 
heads  him  every  way  ;  to  satisfy  his  needs  he  must 
toil  like  the  bee  ;  but  then  toil  is  painful ;  he  is  in 
no  hurry  to  be  dead  ;  there  is  much  to  be  said  for  the 
cow's  life  after  all.  What  a  cruel  dilemma  lay  thus 
before  primitive  man  !  Fortunately  he  was  muddle- 
headed  from  the  outset  ;  and  he  never  sat  down  to 
think  it  out.  If  he  had,  he  would  be  sitting  there  still, 
and  where  would  be  the  solution  ?  But  man,  little 
knowing  how  or  why,  works  out  his  destiny  at  the 
last. 

Consider  the  life,  "  nast}^  brutish  and  short,"  which 
he  led  in  the  dark  and  painful  ages  of  his  infancy, 
stalking  his  quarry  with  a  brittle  flint,  hoeing  up  the 
sods  for  his  miserable  corn  crop  with  the  beak  of  a 


WORK  17 

broken  bough,  grinding  the  grain  between  two  boulders, 
and  then,  as  like  as  not,  going  hungry  to  bed,  because 
the  rain  put  out  his  fire.     The  wonder  is  that  he  should 
have   survived   at   all.     For   to   make   matters   worse 
he  bred  and  multiplied  exceedingly,  and  just  when  it 
seemed  to  call  for  a  miracle  to  provide  food  for  all  the 
mouths,  the  miracle  actually  did  happen.     For  there 
broke  on  his  dull  brain  the  magic  of  invention.     Some 
bright  spirit, — Tubal  Cain  is  the    name  which  legend 
gave   him — was   one   day   discovered   turning   up   his 
fallow  with  a  preposterous  implement  to  which  he  had 
actually   harnessed   the   elder   and   stronger  members 
of  his  family.     I  have  little  doubt  that  his  neighbours 
called  him  ugly  names,  said  that  this  was  an  improper 
use  of  children,  and  that  it  was  worse  than  useless  to 
plough    the    soil    so    deep,    and   generally   prophesied 
disaster.     None  the  less  his  crop  succeeded  ;    he  had 
broken  four  acres  to  his  neighbour's  two,  and  ear  for 
ear  his  yield  was  twice  as  heavy.     After  that  inventions 
followed   thick    and   fast  ;    first   came   wheeled   carts, 
saving    an   infinity   of    trouble  ;     then    boats    for   the 
navigation  of  seas  and  rivers  ;    more  wonderful  still 
machines  which  would  turn  yarn  into  cloth  with  twenty 
times  the  speed  of  the  most  skilful  hand  weaver.     By 
the  time  all  this  was  accomplished,  it  might  be  thought 
that   man  would  have   been   contented  with  his  lot  ; 
for  food  of  a  sort  was  now  plentiful ;    his  labour  was 
lighter  ;    and  the  animals  had  long  ere  this  been  made 
his  slaves  and  upon  them  were  foisted  the  least  attrac- 
tive of  his  tasks  ;   he  might  well  let  invention  be  ;  but 
not  a  bit  of  it  ;    he  went  one  better  and  proceeded  to 
harness,    as    they   say,     the     elements.     Fire,     water, 
electricity   (we   have  reached   our  grandfathers'    time 
by  now)    were  each  in  turn  summoned  in  to  p  ay  ; 
and  he  can  boast  to-day  of  engines  and  machineries 
so   powerful   and   ef^cient   that   one   man   at    a   lever 
can  perform  the  function  of  ten,  twenty,  or  a  hundred 


i8  NEW  FALLACIES  OF  MIDAS 

hands ;  from  which  it  may  be  seen  that  though 
thinking  may  not  add  one  cubit  to  our  stature,  it  can 
multiply  our  food  and  drink  a  thousand  fold. 

I  Thus  man  by  the  use  of  his  native  wit  has  succeeded 
beyond  belief ;  mechanical  invention  and  scientific 
study  of  the  earth's  resources  had  performed  a  miracle 
of  progress  ;  yet  even  this  would  have  been  impossible 
but  for  one  other  and  most  important  principle  of 
method.     Organisation  is  the  main-spring  of  all  success. 

/  Just  as  victories  do  not  fall  to  a  rabble,  and  a  nation 
at  war  must  organise,  so  man  might  exhaust  all  his 
ingenuity  and  lay  his  schemes  never  so  wisely,  but 
hardly  a  step  of  progress  could  he  make  without  the 
disciplined  co-operation  of  his  fellows. 

There  was  once  a  time  (though  it  is  so  long  ago  that 
I  daresay  historians  would  deny  it  ;  )  when  every  man 
was  jack  of  all  trades  ;  he  raised  his  own  corn,  baked 
his  own  bread,  manufactured  his  own  implements,  and 
was,  in  a  word,  his  own  butcher  and  baker  and  candle- 
stick maker,  as  well  as  his  own  police  constable.  We 
may  be  sure  that  he  was  an  indifferent  performer 
at  such  a  variety  of  jobs  ;  and  the  mere  time  he  wasted 
in  passing  from  one  to  the  other  was  lamentable.  But 
it  was  not  so  long  before  he  discovered  a  better  way. 
Were  he  himself  to  give  his  whole  day  to  raising  of 
the  corn,  while  another  man's  business  was  to  grind 
it,  a  third  to  bake  it  into  loaves,  and  a  forth  to  distribute 
these  among  the  neighbours,  what  an  ecomony  of  time 
and  what  an  increase  of  skill  would  result  all  round. 
So  each  individual  undertook  to  drive  a  separate  trade, 
and  specialisation  became  the  order  of  the  day.  Ever 
since  then  this  principle  has  developed  more  and  more, 
until  to-day  even  the  simplest  article  of  use  is  the  work 
not  of  a  single  craftsman  but  of  many.  Half-a-score 
of  processes  for  example,  have  gone  to  the  making  of 
this  book  ;  one  man  set  up  the  type,  a  second  put 
it  through  the  press,  a  third  prepared  the  cover-lids,  a 


WORK  19 

fourth  pasted  them  together  at  the  back,  a  fifth 
stamped  the  title,  a  sixth,  sheared  the  leaves  ; — and, 
in  short,  all  that  Caxton  and  his  apprentice  performed 
with  two  pairs  of  hands,  now  engages  an  army  of 
workers.  The  result  is  that  where  the  Westminster 
Press  turned  out  a  single  book  the  modern  publishing 
house  can  turn  out  a  thousand  ;  and  publication  is 
so  cheap  that  the  deluge  of  printed  matter  is  nothing 
short  of  a  general  nuisance.  It  is  the  same  with  every 
trade.  Specialised  labour  is  an  art  we  have  learned 
perhaps  only  too  well,  but  though  the  clothes,  pictures, 
furniture,  crockery  and  wall-papers  which  our  great 
factories  shower  upon  us,  are  inartistic  sorry  stuff, 
they  are  at  least  both  plentiful  and  cheap. 

It  is  a  far  cry  from  the  ample  conveniences  of  modern 
life  back  to  the  naked  destitution  of  our  forefathers. 
Thousands  of  years  have  passed  since  they  faced  the 
grim  alternative  of  grinding  drudgery  or  sure  starvation. 
To  say  that  their  dilemma  has  been  solved  is  perhaps 
to  say  too  much.  The  masses  are  still  discontented 
with  their  lot,  and  heaven  knows  there  is  little  remission 
from  their  toil.  But  there  are  those  who  claim  that  the 
solution  lies  already  in  our  power,  did  we  but  care  to 
grasp  it.  They  tell  us  that  we  have  only  to  abolish 
property,  tax  the  land,  nationalise  the  railways, 
adopt  a  tariff,  or  apply  once  and  for  all  some  grand 
heroic  remedy  and  the  millenium  will  be  here  to-morrow. 
I  doubt  if  it  is  as  near  as  that,  or  whether,  when  it 
comes,  it  will  be  by  such  means  as  these  ;  but  it  is 
something  surely  that  such  a  hope  is  even  whispered. 
We  may  not  yet  have  reached  the  goal  ;  but  let  us  at 
least  recognise  what  a  distance  we  have  travelled. 

Man's  first  aim,  as  we  said,  was  the  satisfaction  of  his 
wants.  How  far  has  he  achieved  that  ?  He  began 
life  in  a  beggarly  fashion,  scarcely  able  to  keep  body 
and  soul  together.  Now,  even  the  poorest  are  able  to 
feed,   house  and  clothe  themselves  and  find,  perhaps. 


20  NEW  FALLACIES  OF  MIDAS 

a  trifle  over  to  send  the  children  to  the  picture  palace. 
The  greatest  change  of  all  has  come  during  the  last 
hundred  years  :  and  though  there  is  no  need  here  to 
institute  a  statistical  comparison,  or  estimate  the  scale 
of  wages,  the  price  of  comforts,  or  the  purchasing 
power  of  money  in  1817  and  1917,  yet  it  is  worth  while 
to  set  down  a  story  told  of  a  country  labourer  just  a 
century  ago.  When  he  was  already  an  old  man,  he 
was  asked,  as  a  point  of  interest,  to  recall  what  had  been 
the  most  memorable  treat  in  his  long,  but  uneventful 
life.  His  reply  must  have  come  as  a  shock  even  in 
those  days  ;  else  it  would  hardly  have  been  recorded. 
He  could  recollect,  he  said,  having  enjoyed  no  greater 
pleasure,  taking  all  in  all,  than  when  by  a  rich  neigh- 
bour's bounty  he  made  a  meal  off  a  cold  rice  pudding. 
Such  an  answer  is  simply  unthinkable  to-day. 

Man's  second  aim  or  desire,  as  we  have  seen,  was  to 
reduce  the  severity  of  his  daily  toil.  How  far  he  has 
succeeded,  is  difficult  to  compute,  the  conditions  of 
industry  have  so  changed  and  there  is  so  wide  a 
difference  between  the  labour  of  the  mediaeval  peasant, 
and  the  labour  of  the  modern  factory  hand.  There 
are  still  no  doubt  many  trades  which  require  a  great 
out-put  of  physical  strength.  Nevertheless,  upon  the 
whole,  the  advent  of  machinery  has  in  a  very  high 
degree  lightened  the  burden  of  labourers.  The  best 
proof  of  this  lies  in  the  fact  that  during  the  war  women 
have  been  able  to  take  men's  places  in  the  factories 
and  (what  is  more)  have  maintained  the  output  of 
production  at  a  rate  but  slightly  lower  than  in  preceding 
years.*  Labour  to-day  demands  perhaps  more  con- 
centrated energy  than  in  the  past  ;  yet  that  concen- 
tration is  itself  a  step  nearer  the  goal.  It  may  be 
that  the  primitive  man  was  a  bad  time-keeper,  and  I 
daresay  that  the  Anglo  Saxon  labourer  idled  behind 
his  master's  back,  but  I  wonder  what  either  of  them 

*  In  many  cases  even  higher. 


WORK  21 

would  have  thought  had  he  heard  men  seriously  pro- 
posing the  introduction  of  an  eight  hour  day. 

The  world  is  not  perfect  yet  ;  many  work  too  hard 
and  go  too  short  ;  but  the  great  change  has  begun  ; 
and  labour  to-day  claims  shorter  hours,  entails  less 
physical  exhaustion,  yet  at  the  same  time  is  infinitely 
more  productive  than  the  wisest  prophet  could  ever 
have  foretold. 

Yet  it  is  not  to  be  thought  that  the  march  of  civilisa- 
tion is  a  sort  of  Rake's  progress,  and  that  as  life 
becomes  easier  and  pleasanter  for  man,  he  must  needs 
fall  into  careless,  idle  ways  ;  far  otherwise.  His  vigour 
is  not  diminished  by  the  increase  of  his  powers.  The 
better  trained  his  mind,  the  greater  his  capacity  for 
work  ;  and  as  work  becomes  more  complex,  it  calls 
for  a  more  concentrated  and  effective  energy.  The 
performance  of  modern  music  (to  take  one  striking 
instance)  demands  an  exercise  of  mind  and  body, 
such  as  no  mediaeval  minstrel  ever  dreamt  of.  The 
modern  craftsman  may  work  short  hours  ;  but  during 
those  hours  his  whole  energy  and  attention  are  set  upon 
his  task,  nor  is  even  his  leisure  wasted  after  the  manner 
of  the  agricultural  labourer,  whose  favourite  relaxation 
is  a  complete  vacancy  of  mind.  The  world,  in  short, 
will  be  found  more  alert  to-day,  more  ambitious  and 
(if  you  will)  more  restless  than  ever  it  was  before. 
Our  life  is  crowded  with  incident  and  variety  of 
occupation  ;  and  if  reformers  clamour  for  a  reduction 
of  working  hours,  it  is  not  a  sign  that  the  race  has 
become  lethargic  or  enfeebled.  Rather  it  points  to 
a  fuller  and  higher  conception  of  life's  purpose,  and 
reminds  us  that  there  exist  other  activities  than  the 
winning  of  daily  bread.  For,  in  a  sense,  all  activity 
is  work.  The  reading  of  a  botjk  which  kindles  ideas 
or  inform^  the  mind  is  work  ;  talk  which  sets  the  brain 
thinking  is  a  more  worthy  use  of  time  than  hoeing 
turnips.     So  what  we  need  to  consider  is  not  how  much 


22  NEW  FALLACIES  OF  MIDAS 

or  how  little  work  we  ought  to  do,  but  the  quality  of 
what  is  done.  And  above  all,  let  us  remember  that  it 
is  the  motive  that  determines  what  the  quality  will 
be.  Even  the  highest  forms  of  work  may  seem  mere 
drudgery  when  the  right  spirit  is  wanting  :  but  the 
meanest  task  performed  for  an  ideal  is  changed  from  a 
burdensome  necessity  and  becomes  an  inspiration 
and  a  joy. 

But,  though  I  suppose  every  thinker  from  Aristotle 
downward  has  agreed  in  ranking  the  mental  activities 
'as  higher  and  more  desirable  than  activities  of  the  body, 
yet  we  must  not  fall  into  the  error  of  depreciating 
physical  labour.  It  is  not  necessary  merely,  but 
wholesome  too.  We  consider  a  man  who  never  uses 
his  brain,  to  be  little  better  than  a  brute  ;  but  the 
opposite  extreme  is  equally  undesirable  ;  and  there 
is  something  almost  inhuman  about  the  man  who 
forgets  the  existence  of  his  body.  The  intellectual  and 
sedentary  life  requires  some  antidote.  It  matters  but 
little  wherein  that  antidote  is  found  ;  whether  in 
sport  and  active  recreation,  in  the  exercise  of  art  and 
craftmanship,  or  even,  (where  Ruskin  once  seriously 
set  out  to  find  it)  in  the  more  strenuous  exercise  of 
stone-breaking.  What  seems  of  more  importance  is 
that  leisure  should  mean  for  us  all  not  activity  merely, 
but  activity  in  some  sense  complementary  to  our  pro- 
fessional work.  Even  so  in  this  dualism  of  occupation 
a  genuine  difficulty  seems  to  arise.  I  mean  that  for  the 
majority  of  men  to-day  life  is,  as  it  were,  divided  into 
two  compartments,  the  tim.e  during  which  they  work 
with  an  object,  and  the  time  which  they  waste  for 
want  of  one.  So  they  come  to  regard  leisure  as  a  mere 
cessation  of  activity,  or  at  best  as  an  activity  that  has 
no  purpose.  If,  as  is  probable,  the  future  development 
of  civilisation  makes  bread-winning  more  easy,  and 
reduces  still  further  our  daily  task  of  necessary  work, 
the  problem  will  be  even  more  acute.      The  time  may 


WORK  23 

come  when  a  six  hour  working  day  will  be  the  rule  ;  and 
then  we  shall  be  even  more  at  a  loss  to  utilise  a  leisure 
thus  enlarged.  A  real  need  will  be  felt  for  a  motive 
which  will  give  a  fresh  unity  to  life  and  enable 
a  man  to  feel  that  all  his  activities  are  directed 
to  one  purpose  and  not  two.  That  motive  cannot 
be  a  merely  sefish  motive  ;  for  the  longer  are  the 
hours  of  leisure,  the  more  inadequate  will  mere 
amusement  be  to  fill  them.  So  men  will  naturally  be 
driven  to  devote  more  of  their  spare  time  to  acts  of 
useful  service.  Each  in  his  own  way  will  contribute 
something  towards  making  life  more  pleasant,  more 
enlightened  and  more  beautiful  for  his  fellowmen  ; 
and  in  so  doing  he  will  find  more  contentment  than  in 
his  wasted  hours.*  And,  since  this  motive  of  service  is 
also  the  motive  by  which  all  true  and  honest  work  is 
inspired,  we  shall  find  in  it  the  very  unity  of  purpose 
which  we  have  sought.  Nor  is  it  strange  that  such  an 
ideal  alone  should  satisfy  ;  for  alone  it  is  able  to  give 
to  the  scattered  incidents  of  life  a  clear  connected 
meaning.  It  is  not  like  that  spurious  religion  which 
begins  at  the  Church  door  and  is  forgotten  from  Monday 
morning  till  Saturday  night.  It  embraces  the  whole  of 
man's  activities,  and  passes  with  him  from  the  toil 
and  sweat  of  the  workshop  into  the  pastimes  and 
amenities  of  life. 


*  If  this  statement  seems  to  strike  too  high  a  moral  note,  it  is  only 
necessary  to  refer  to  the  Boy  Scout  movement  for  support  of  it.  Boys 
arc  happier  doing  a  "  good  turn  "  to  a  neighbour  or  improving  the 
efficiency  of  the  troop  than  they  ever  were  when  idling  at  street-corners 
or  attending  the  local  cinema. 


CHAPTER  III 

CAPITAL 

Living  as  we  do  in  an  age  which  the  triumphs  of  human 
skill  and  ingenuity  seems  to  have  set  upon  a  plane 
immeasurably  higher  than  all  the  civihsations  of  the 
past,  there  is  Httle  wonder  that  the  modern  world 
has  begun  to  have  a  fine  conceit  of  its  own  wisdom. 
Seeing  Science  thus  miraculously  exploited,  Nature 
already  mastered  and  pressed  into  our  service,  a 
prosperity  more  widely  extended  and  a  civilisation 
more  progressive  than  ever  was  before,  we  conclude 
that  we  are  a  little  better,  or  a  least  a  good  deal  wiser 
than  the  fathers  who  begat  us.  And  so,  like  the 
thankless  heirs  of  some  great  inheritance  we  over-look 
or  underrate  the  debt  which  we  owe  to  the  patient  toil 
of  the  scientists,  chemists,  and  mechanical  inventors 
of  the  previous  century  and  even  of  those  forgotten 
pioneers  who  first  devised  the  axe-head  and  the  plough. 
When  we  boast  of  the  triumphs  of  modern  progress 
and  plume  ourselves  on  the  giant  strides  we  are  making, 
we  should  in  very  justice  recollect  that  it  is  often 
the  first  faltering  steps  which  count  the  most. 

But  it  is  not  only  to  the  more  brilliant  spirits  of 
discovery  and  invention  that  we  are  debtors.  The 
great  host  of  unnamed  workers  who  tilled  our  fields 
and  set  up  our  homes,  dug  our  mines  and  bridged 
our  rivers,  have  also  a  claim  upon  our  gratitude.  It  is 
to  them  we  owe,  in  part  at  least,  the  vast  hoard  of 
accumulated  wealth  which  every  generation  be- 
queathed to  its  successor.  They,  like  thrifty  parents, 
built  up  the  capital,  of  which  we,  their  sons  and  heirs, 
enjoy  the  interest. 


CAPITAL  25 

Capital  is  a  word  with  a  falsely  financial  sound  about 
it.  Too  often  we  speak  of  it,  as  though  it  were  a 
matter  of  bank-notes  or  dollars  or  pounds  sterling,  a 
mere  parcel  of  stocks  and  shares,  or  a  deposit  at  the 
bank.  But  these  are  only  the  tokens  and  arithmetical 
symbols  of  capital.  For  capital  itself  may  take  a 
thousand  or  ten  thousand  forms. 

The  short  parable  which  follows  will  make  my 
meaning  clear.     . 

Not  many  years  ago,  Mr.  Pennywise,  the  well- 
known  print  collector,  who  then  lived  in  a  villa  at 
Ealing,  and  worked  in  the  city  as  a  clerk,  having  saved 
a  couple  of  hundred  pounds,  invested  the  whole  of 
that  sum  in  Mexican  Railways — a  transaction  calcu- 
lated, as  he  thought,  to  bring  in  due  course  a  welcome 
addition  to  his  income.  He  flattered  himself  vastly 
on  this  wise  disposition  of  his  savings  and  entertained 
a  secret  contempt  for  an  improvident  neighbour 
who  had  expended  a  similar  sum  upon  the  purchase 
of  a  car.  The  railway  dividends,  when  they  arrived, 
exactly  covered  the  cost  of  a  second  class  season  ticket 
to  town  where  his  business  then  took  him  every  week- 
day of  the  six.  His  neighbour  on  the  other  hand,  who 
had  been  previously  accustomed  to  travel  with  him  in  a 
third-class  carriage,  now  preferred  to  make  the  journey 
in  a  car.  Both  men  were  well-satisfied  with  this 
change  in  their  daily  habits,  and  with  the  use  to  which 
their  capital  was  put,  but  as  events  proved  the  owner 
of  the  car  still  continued  to  enjoy  the  luxury  of  his 
morning  and  evening  drive  long  after  the  calamitous 
outbreak  of  civil  war  in  Mexico  and  the  subsequent 
collapse  of  Mexican  Railroad  stock.  During  the  next 
year  and  for  many  years  which  followed,  the  Mexican 
investment  paid  no  dividend  at  all,  and  this  disaster 
so  changed  the  financial  preconceptions  of  Mr.  Penny- 
wise  that  he  resolved  to  employ  his  future  savings 
in  the  purchase  of  old  prints,  in  which,    as  it  chanced, 


26  NEW  FALLACIES  OF  MIDAS 

he  had  an  excellent  taste,  and  from  which  he  derived 
a  satisfaction  that  was  not  merely  highly  genteel, 
but  perfectly  secure  against  the  accidents  of  revolution 
or  finance. 

Thus  do  men  employ  their  capital,  some  this  way 
and  some  that.  In  essence,  capital  never  consists 
in  money,  but  in  such  things  as  railroads,  motor-cars 
and  prints.  When  Mr.  Pennywise  lost  his  dividend, 
each  morning  still  brought  his  neighbour  a  not  in- 
adequate return  for  his  investment,  in  his  daily  ride 
to  town  ;  and  long  after  the  car  was  on  the  dust  heap, 
Mr,  Pennywise  continued  to  enjoy  the  contemplation 
of  his  prints.  And  last  year,  when  his  collection  was 
sold  at  Christie's  the  proceeds  of  the  sale  established 
his  widow  and  sorrowing  family  in  a  secure  and  com- 
fortable fortune.  Capital  is  wealth  saved,  and  not 
consumed  wealth  :  Wealth  consumed  gives  satisfaction 
to  our  wants,  but  wealth  saved  is  the  means  to  the  pro- 
duction of  more  wealth.  *  Let  us  take  an  illustration 
more  obvious  and  simple  than  the  cases  hitherto 
disscussed.  The  first  rude  axe  made  by  palaeolithic 
man  was  capital  to  him.  Its  manufacture  arose, 
as  we  may  guess,  from  his  having  more  corn  than  he 
could  eat.  The  harvest  was  for  once  unusually  pro- 
ductive, and  he  had  enough  to  last  him  for  two  suc- 
cessive years.     So  when  seed  time  came  round,  it  did  not 

*  The  purchase  of  a  motor-car  might  at  first  sight  be  reckoned  as 
spending  or  consumption  of  wealth  rather  than  saving  it.  On  second 
thoughts  however,  it  will  be  seen  that  whatever  vehicle  enables  a  man 
to  reach  town  more  quickly  and  there  to  spend  his  whole  day  upon 
productive  activity,  has  as  much  right  to  be  classed  under  capital  as 
any  othc"  article  which  assists  him  in  the  business  of  production  ;  for 
instance  the  railway  truck  which  bring?  coal  to  his  office  or  the  telegraph 
wire  which  provides  him  with  commercial  information.  Indeed  nothing 
is  more  difficult  in  practice  than  to  draw  a  line  between  consumption 
and  investment,  ^'^ery  often  they  are  simply  relative  terms.  Expendi- 
ture, which  is  consumption  relatively  to  what  a  man  has  already  earned, 
may  very  well  be  investment  relatively  to  that  which  he  may  by  its 
means  be  able  to  earn  or  produce  hereafter.  Even  in  the  eating  of  a 
loaf  of  bread  this  twofold  aspect  is  present. 


CAPITAL  27 

find  him  in  the  field.  He  was  up  in  the  mountains 
chipping  at  a  flint.  This  was  a  lengthy  business ; 
but  when  at  last  the  axe  was  made,  he  took  it  out  into 
the  forest  and  felled  a  tree  out  of  which  he  fashioned 
a  strange,  but  not  ineffective  implement  for  breaking 
up  the  soil  ;  and  when  seed  time  came  round  a  second 
time,  he  was  better  armed  than  ever  before.  He  soon 
discovered  that  his  year's  work  had  brought  him  a  two- 
fold benefit ;  first  he  was  able  to  break  up  a  double 
acreage  of  land  producing  at  least  a  double  quantity 
of  corn  ;  and  secondly  he  was  able  to  break  it  with 
half  the  expenditure  of  strength.  His  new  tools  were 
a  permanent  aid  in  the  production  of  fresh^wealth,  and 
from  them  he  derived  a  recurrent  benefit — and  not  he 
alone  but  his  sons  and  his  sons'  sons  after  him.  His 
axe  and  spade  perished,  or  were  discarded ;  but 
other  and  better  implements  took  their  place.  And 
so  by  slow  degrees  the  world  became  immeasurably 
richer,  being  stocked  by  centuries  of  labour.  We,  the 
heirs  of  those  who  have  gone  before,  live  in  houses  we 
did  not  build,  draw  water  from  cisterns  we  did  not 
dig,  and  eat  the  fruit  of  vineyards  and  orchards  which 
others  planted  long  before  our  time.  Implements  of 
a  thousand  kinds,  machinery,  mines,  railroads,  ships, 
harbours,  and  whatever  else  we  inherit,  these  are  the 
things  the  possession  of  which  makes  life  so  easy  for 
us,  and  the  lack  of  which  would  make  it  at  once  so 
difficult.     They  are  the  world's  capital. 

All  capital  comes  from  a  surplus.  By  the  nature 
of  things  man  is  constantly  consuming  what  he  pro- 
duces ;  and  if  his  consumption  keeps  even  pace  with 
his  production,  no  progress  can  be  made.  Somehow 
or  other  he  must  get  ahead  of  his  consumption,  pay  his 
way  in  advance,  steal,  as  it  were,  a  march  on  time.  The 
opportunity  may  come  to  him  in  one  of  three  different 
ways — it  may  come  by  working  harder,  as  the  stone- 
age  man  might  have  made  his  axe  by  sitting  up  at 


28  NEW  FALLACIES  OF  MIDAS 

nights.  It  may  come  by  working  more  intelligently, 
as  when  man  first  learnt  to  manure  the  soil  and  so 
increase  its  yield.  Or  lastly  it  may  come  by  a  stroke 
of  fortune,  an  abnormal  harvest,  a  lucky  vein  of  ore, 
a  discovery  of  some  new  property  in  nature.  It  matters 
little  however  how  the  surplus  comes,  what  matters 
much  is  how  the  surplus  shall  be  used.  If,  because  the 
granary  is  full  the  farmer  neglects  his  field,  and  like 
the  rich  fool  in  the  parable,  turns  to  indolent  consump- 
tion, in  due  course  the  granary  will  be  emptied  and 
matters  stand  just  where  they  were  before.  Even  the 
man  who  hid  his  talent  in  the  napkin  acted  more 
prudently  than  that.  Yet  a  surplus  resting  idle  and 
not  put  to  proper  use  is  capital  in  no  true  sense.  For 
it  is  the  essence  of  capital  that  it  should  breed  fresh 
wealth,  and  secure  to  man  some  present  advantage 
or  profit.  Whether  the  surplus  sets  him  free  to  make 
a  spade,  weave  a  cloak  or  build  a  house,  the  issue  is 
the  same.  For  in  each  case  his  future  equipment 
will  be  more  complete  as  he  goes  about  his  business. 
With  a  cloak  on  his  back  he  can  brave  any  weather, 
he  can  dig  his  field  quicker  with  a  spade  in  his  hand, 
he  will  sleep  sounder  and  wake  fresher  with  a  roof 
over  his  head.  In  short,  he  will  be  not  only  a  happier, 
but  a  more  useful,  more  efficient  and  more  productive 
man.  His  surplus  has  not  been  used  as  an  oppor- 
tunity for  some  momentary  excess,  a  barren  tempta- 
tion to  a  superfluous  meal  or  an  idle  holiday.  It  has 
turned  to  an  interest-paying  investment  ;  and  in  the 
long  run  it  will  be  found  as  it  was  in  the  fairy  tale 
that  the  golden  eggs  are  far  more  valuable  than  the 
flesh  of  the  goose  herself  which  lays  them. 

In  practice,  it  is  true,  the  use  of  capital  is  a  more 
complicated  matter.  Now-a-days  a  man  does  not 
turn  aside  to  labour  in  some  new  direction  because  his 
ordinary  labour  has  brought  him  a  surplus  above  his 
normal   needs.     He  invests  what   he   can   save  in   a 


CAPITAL  29 

company  or  business,  or  lends  it  to  a  bank  which  does 
this  for  him.  Yet  the  transaction  is  virtually 
the  same.  If  he  buys  shares  in  a  cotton  mill,  he 
becomes  owner  or  part  owner  of  a  machine  which  makes 
handkerchiefs  for  other  men  ;  and  these  other  men  will 
give  him  money  for  the  same  wherewith  to  satisfy 
his  own  needs.  Even  when  capital  is  counted  in 
millions,  and  finance  is  one  vast  game  of  I.O.U's  there 
is  still  no  difference.  When  men  speak  for  instance 
of  the  nation's  capital,  it  is  not  of  hoarded  gold  that  they 
are  thinking,  but  of  our  coal  mines  and  iron  foundries, 
our  docks  and  steam-boats  and  ship-canals,  our  rail- 
roads and  factories,  not  in  England  only  but  built  by 
English  enterprise  and  by  English  savings  in  every 
quarter  of  the  globe.  These,  like  the  primitive  axe- 
head,  are  simply  the  results  of  a  surplus  well  and  wisely 
used.  Capital  and  interest  are  but  new  names  for 
things  which  have  existed  since  the  world  began. 

And  since  the  world  has  been  going  for  a  good  while 
now,  the  bulk  of  its  capital  has  steadily  and  prodigi- 
ously increased  until  the  very  face  of  nature  has  been 
transformed  by  the  handiwork  of  man.  Capital  is  all 
around  us,  not  only  in  the  roads  by  which  we  travel 
but  in  the  lamps  which  light  them  up  at  night,  not  only 
in  the  dams  which  keep  our  rivers  from  flooding  out 
the  valleys,  but  in  the  pleasure-boats  which  cruise  upon 
them.  In  a  word,  it  is  the  whole  paraphernalia  of 
civilised  existence.  In  every  trivial  daily  act  we  needs 
must  use  this  accumulated  product  of  man's  toil  both 
past  and  present  ;  and  we  have  come  so  to  rely  upon  its 
use  that  if  it  were  suddenly  taken  from  us  we  should 
be  plunged  back  into  those  dark  and  helpless  ages 
when  mankind  lived  and  fed  like  beasts,  when  to  sleep 
was  to  sleep  under  the  stars,  when  to  travel  was  to 
go  afoot  ;  when  each  depended  for  his  very  survival 
upon  brute  strength,  tough  teeth  and  nimble  fingers. 
These  at  least  man  still  controls  whatever  catastrophe 


30  NEW  FALLACIES  OF  MIDAS 

befalls  him — and  when  all  his  capital  is  gone  even  the 
bankrupt  can  command  the  price  of  his  body's  labour. 
For  us,  then,  who  owe  so  great  a  debt  to  those  who 
have  gone  before,  there  remains  a  corresponding  duty. 
It  is  not  for  us  to  spend  where  they  have  spared  ;  nor 
is  it  enough  to  leave  things  simply  as  we  found 
them.  Both  for  ourselves  and  for  those  that  will 
come  after  us,  we  must  (if  progress  is  to  continue) 
accumulate  still  vaster  capital,  and  put  it,  if  possible, 
to  still  better  use.  Thrift  in  the  years  before  the  war 
was  not  a  fashionable  virtue,  and  even  now,  supposing 
the  lesson  of  saving  to  have  been  learnt,  we  need  to 
study  more  carefully  the  disposition  of  our  savings. 
This  is  perhaps  the  crucial  question,  for  the  possibilities 
are  legion.  To  invest  our  spare  cash,  like  Mr.  Penny- 
wise,  in  prints,  may  well  prove  a  profitable  deal ; 
but  aesthetic  pleasure,  however  admirable  in  itself, 
does  nothing  whatever  to  satisfy  the  more  pressing 
needs  of  man.  Even  the  possession  of  a  motor  car, 
while  adding  to  its  owner's  comfort  and  perhaps  in 
some  small  degree  to  his  efficiency,  does  not  very 
materially  contribute  to  that  larger  end.  The  Mexican 
rail-road  on  the  other  hand,  though  it  turned  out  to 
be  a  temporary  failure,  must  have  added  considerably 
to  the  world's  supply  of  food.  It  encouraged  settlers 
to  open  up  new  country,  brought  them  implements 
or  whatever  else  they  needed,  and  then  in  turn  brought 
back  to  others  the  products  of  their  labour.  In  the 
use  and  investment  of  our  capital,  it  is  a  real  duty  to 
consider  not  only  the  return  which  it  will  bring  to  our 
own  pockets,  but  the  service  which  it  may  perform  to 
mankind  at  large.  Capital,  which  merely  ministers  to 
the  comfort  or  luxury  of  men,  is  less  serviceable 
than  that  which  provides  them  with  the  necessities 
of  life  ;  and  so  long  as  the  more  pressing  needs  re- 
main unsatisfied  theirs  is  a  prior  claim.  Yet, 
while  we  endeavour  to  improve  and  multiply  the  agents 


CAPITAL  31 

of  production,  there  is  one  agent  which  it  is  of 
first  importance  that  we  should  not  forget.  We  must 
never  omit  to  foster  that  human  capital  (if  so  it  may 
be  called)  which  consists  in  the  physical  powers  and 
mental  efficiency  of  man  himself.  It  is  far  better  to 
build  up  a  healthy,  and  keen-witted  race  than  to  erect 
an  extra  factory  or  mill.  For  machinery  may  be 
bought  at  too  dear  a  price,  if  the  ecomony  which  buys 
it  starves  the  strength  and  vigour  of  men  who  M^ork 
it.  So  it  is  obvious  that  the  conservation  of  this 
human  capital  must  take  precedence  of  all  the  rest,  and 
yet  this  is  a  truth  which  has  too  often  been  forgotten 
both  by  individuals  and  by  peoples.  The  French 
nation  is  noted  as  a  model  of  thrift ;  the  savings  of 
French  workers  are  invested  in  every  continent  ; 
yet  (as  some  think)  their  economy  has  resulted  in 
a  standard  of  living  which  is  too  low  for  maximum 
efficiency  ;  and  it  may  well  be  that  this  passion  for 
thrift  is  one  among  other  causes  of  a  declining  birth- 
rate. The  same  mistake  has,  in  the  past  at  least, 
been  only  too  prevalent  among  English  manufacturers, 
who  were  often  more  concerned  with  building  up  their 
business  and  providing  new  machinery  than  with 
paying  their  employees  a  wage  sufficient  for  their 
wants  ;  the  natural  result  has  been  that  the  workers' 
health  has  been  sapped  by  insufficient  nourishment  ; 
and  so  what  the  out-put  of  the  factories  gained  by  im- 
proved mechanical  efficiency  was  lost  again  by  the 
incapacity  of  the  workers  to  perform  their  best  work. 
It  is  clear  that  to  strike  a  proper  balance  between 
consumption  of  income  and  economy  of  income  is 
never  an  easy  matter  ;  but  before  all  it  is  necessary 
to  realise  that  we  have  not  here  to  deal  with  two 
alternatives,  which  are  mutually  opposed,  but  with 
two  courses  leading  to  a  single  goal  ;  which,  is  by 
whatever  means,  to  achieve  the  most  complete  and 
permanent  satisfaction  of  all  human  needs. 


CHAPTER  IV 

THE  PARADOX  OF  PROGRESS 

Nothing  seems  easier  in  theory  than  to  prophesy 
milleniums.  For  ten  thousand  years  man  has  toiled 
with  tireless  patience  ;  he  has  developed  vast  resources  ; 
he  has  devised  new  and  efficient  methods  of  production  ; 
and  the  time  must  surely  be  coming  when  he  will 
reap  the  due  reward  of  all  his  industry  and  thrift. 
In  old  age  the  individual  labourer  counts  upon  ceasing 
from  his  toil  and  enjoying  his  well-earned  respite  ; 
and  when  campaigning  days  are  over,  the  veteran 
obtains  his  full  discharge.  Is  there  then  for  the  human 
race  at  large  no  ultimate  period  of  emancipation 
from  the  uncongenial  drudgery  of  bread-winning  ? 
Surely  we '  may  look  forward  to  some  distant  day 
when  the  whole  business  of  providing  food  and  drink 
may  be  left  to  mere  machines,  and  life  may  be  given 
wholly  to  higher  and  worthier  activities. 

Yet  when  we  cease  to  dream  of  what  might  be, 
and  face  the  facts  which  are,  we  must  recognise  how 
little  sign  there  is  as  yet  of  that  day  coming.  For  what 
do  we  see  around  us  ?  It  is  certainly  no  Utopian 
universe — the  manhood  of  whole  cities  confined  in 
stuffy  offices  and  bending  from  high  stools  over  the 
calculation  of  innumerable  ciphers,  the  populations 
of  broad  counties  spending  their  days  in  subterranean 
caverns  intent  upon  their  grimy  mole-like  business, 
the  health  of  our  women  wasted  amid  the  dust  and 
rattle  of  unwholesome  factory  sheds,  our  men's  vigour 
sapped  before  the  scorching  breath  of  furnace  fires, 
our  children  taken  from  school  and  set  to  earn  their 

3* 


THE  PARADOX  OF  PROGRESS     33 

living  at  fourteen  years  of  age.  Every  day  competition 
seems  to  grow  tenser  and  more  bitter.  The  more 
trade  thrives,  the  heavier  seems  the  demand  upon  our 
workers  ;  and,  as  the  world  grows  rich,  the  more 
conscious  does  it  become  of  the  poverty  of  millions. 
Fate  seems  to  have  cheated  us,  as  Laban  cheated 
Jacob,  and  just  when  we  look  to  receive  our  promised 
recompense,  a  fresh  term  is  added  to  our  labours. 

In  all  this,  if  there  lies  no  fault  of  ours  which  we  can 
remedy,  there  is  at  least  a  puzzle  to  which  we  must 
find  an  answer. 

Dean  Swift  professed  to  find  one,  when  he  wrote 
his  "  Modest  Proposal  "  for  utilising  the  children  of 
poor  people  in  Ireland.  What  was  wrong  with  the 
world,  as  he  saw  it,  was  simply  that  there  were  too 
many  people  in  it.  We  suffer  from  overcrowding, 
and  the  remedy  which  he  suggested  was  nothing  less 
than  to  make  away  with  superfluous  babies  and  use 
them  as  food  for  the  table.  What  Swift  wrote  in 
irony,  has  been  maintained  by  others  in  grim  earnest. 
Some  like  Malthus,  though  they  would  perhaps  draw 
the  line  at  the  cannibal  feast,  are  convinced  that  the 
only  hope  for  the  ship  of  state  is  to  jettison  some  ot 
its  crew.  Others,  though  they  have  no  stomach  for 
the  remedy,  make  no  doubt  of  the  disease,  and  exult 
in  the  fact  that  birth-rates  are  falling  among  the  more 
civilised  nations.  And  on  the  face  of  it,  the  argument 
is  specious  enough.  Mankind  has  multiplied  at  an 
amazing  rate.  The  population  of  Great  Britain  has 
more  than  doubled  in  a  century.  That  of  Russia 
increases  by  four  millions  every  year.  When  there 
are  so  many  fresh  mouths  to  fill,  it  seems  inevitable 
that  someone  must  go  short  ;  and,  if  there  is  a  short- 
age, the  natural  consequence  is  a  desperate  struggle 
to  survive.  In  short,  while  the  old  quarrel  between 
man  and  nature  is  beginning  to  be  settled,  the  war 
bewfeen  man  and  man  is  increasing  in  violence. 


34  NEW  FALLACIES  OF  MIDAS 

This  sad  and  hopeless  theory  is  happily  mere  moon- 
shine.    For  the  world  is  not  within  a  thousand  years 
of    being    overcrowded.     That    there    are    still    huge 
tracts  of  country  almost  empty,  is  obvious  enough  ; 
in  Russia  a  square  mile  supports  a  population  of  twenty- 
three  persons,  while  in  a  prosperous  land  like  Belgium 
the  average  was  formerly  625.     The  real  question  is 
whether  the  resources   of  the  country  are  adequate 
to  support  the  increased  population.     Now,  if  science 
has  taught  us  one  thing  more  than  another,  it  is  that 
we  know  very  little  indeed  of  the  wealth  which  still 
lies  hidden  in  the  earth.     It  is  an  unfathomed  reservoir 
of  which  hitherto  we  have  but  skimmed  the  surface. 
Not  a  year  passes,  but  it  brings  to  light  new  products 
and  properties  undreamt  of.     Men  have  been  farming 
for  several  thousands  of  years  ;    and  yet  how  little 
do  they  understand  their  business.     English  cornfields 
for  example  produced,  before  the  war,  about  one  fifth 
of  the  grain  which  we  consume.     Yet  we  are  told  on 
the   best    authority   that   by    making   a   clean   sweep 
of  our  old-fashioned  appliances  and  slow  conservative 
methods,  and  by  adopting  a  strictly  scientific  agriculture 
like  the  Danes,  we  might  raise  more  than  a  half,  perhaps 
three  quarters,  possibly  even  the  whole  of  what  we 
need.     If  this  seems  near  to  the  miraculous,  science  has 
many  such  miracles  in  store.     Long  before  our  coal 
fields  are  exhausted,  we  may  be    certain    that  some 
substitute  for  coal  will  be  discovered  ;    and  until   the 
resources  of  the  earth  have  been  fully  and  scientifically 
exploited,    the   growth    of   population   need   have    no 
special  terrors  for  economists.* 

*  In  point  of  fact,  there  is  a  law,  already  proven  in  many  European 
countries,  that  as  the  standard  of  civilisation  is  advanced,  the  rate  of 
increase  declines.  The  increase  of  population  in  Great  Britain  is  now 
less  than  one  per  cent.,  in  France  there  is  a  positive  decrease.  This  is 
due  in  part  no  doubt,  to  the  selfishness  of  individuals,  but  far  more  to 
the  self-restraint  of  parents  who  prefer  to  bring  up  a  small  family  in 
decent  comfort  and  with  a  proper  start  in  life,  rather  than  to  increase 
the  number  of  their  children  to  the  prejudice  of  their  future  happiness 
and  efficiency. 


THE  PARADOX  OF  PROGRESS     35 

Indeed  the  argument  might  very  well  be  all  the 
other  way.  England  could  hardly  be  so  rich  to-day, 
if  her  population  were  no  greater  than  it  was  a  century 
ago  ;  for  our  coal-fields  and  our  iron-mines  could  never 
have  been  exploited.  The  truth  is  that  there  is  a 
positive  advantage  in  numbers,  if  proper  use  is  made 
of  them.  A  battalion  in  which  every  member's  part 
is  regulated  and  the  strength  of  all  combined,  is  some- 
thing more  than  the  aggregate  of  a  thousand  men. 
Such  things  are  not  to  be  calculated  by  rule  of  three ; 
and  it  is  the  same  with  labour.  What  we  need  is  to 
organise  our  efforts,  to  use  each  individual  to  the  best 
advantage,  and  win  our  way  not  by  sheer  power  of 
numbers  but  by  scientific  co-operation.  If  Japhet 
instead  of  joining  his  brothers  in  Noah's  field  had  turned 
his  attention  to  the  science  of  manures  and  spent  his 
time  in  pounding  up  Mammoth's  bones,  I  have  no 
doubt  that  his  labour  would  have  been  more  pro- 
ductive than  it  was  by  working  with  a  spade  ;  and 
the  harvest  would  have  sufficed  to  feed  the  entire 
population  of  the  Ark.  And  so  to-day,  when  the 
nation  increases  in  numbers,  it  does  not  follow  that  the 
new-comers  will  necessarily  be  set  to  work  at  the  old 
industries.  In  modern  campaigns  they  say  that  three 
men  are  employed  behind  the  firing  line  for  every  one 
in  the  trenches  ;  and  equally  in  the  work  of  production 
a  man  contributes  as  much  to  the  success  of  the  harvest, 
if  he  makes  a  plough  as  if  he  drives  it.  So,  though 
every  acre  of  the  earth  were  cultivated  (which  it  is  not) 
there  would  still  be  room  for  helpers  in  the  workshop  or 
the  mine,  or  perhaps  even  more  in  the  laboratory  or  the 
offices  of  the  Board  of  Trade.  The  true  function  of 
science  is  to  increase  the  efficiency  of  the  race,  and  not 
to  curtail  its  numbers.  Wise  use  of  man-power  and 
skilful  adaptation  of  machinery  is  the  swiftest  cure  for 
our  industrial  distresses.  For  not  onl}^  will  efficiency 
increase  production  ;  but  also  by  the  increase  of  produc- 


36  NEW  FALLACIES  OF  MIDAS 

tion  efficiency  will  also  be  itself  increased.  Men  who 
consume  freely  will  also  produce  freely ;  and  experience 
shows  that  the  well-fed  and  prosperous  worker  is  more 
efficient  and  more  productive  than  the  destitute  and 
hungry.  Under  proper  conditions  every  new  child  that 
is  born  into  the  world,  should  be  a  reinforcement  to 
our  strength  and  not  a  drain  on  our  resources  ;  mean- 
while, in  this  faith,  we  need  fear  no  rising  birth-rate 
nor  copy  Spartan  methods  with  our  babies  yet. 

This  old-fashioned  bogey  which  so  alarmed  our 
grandfathers  now  counts  among  exploded  fallacies, 
and  if  we  seek  to  understand  the  paradox  of  modern 
progressand  know  why  a  world  which  has  become  so 
rich  must  still  work  so  hard,  we  shall  not  look  to  the 
growth  of  population,  but  rather  to  the  facts  of  human 
nature.  The  clue  lies  in  studying  psychology  instead 
of  statistics,  and  in  endeavouring  to  reform  ourselves 
rather  than  our  institutions.  The  most  sweeping 
social  revolution  could  not  alone  avail  to  help  us  much. 
For  the  redistribution  of  the  good  things  of  life  would 
be  useless,  unless  the  good  things  continue  to  flow  in 
from  field  and  factory.  And  if  the  flow  is  to  continue, 
so  must  work  also.  The  truth  is  that  as  long  as  human 
needs  and  appetites  increase,  the  stress  of  work  cannot 
be  diminished.  For  a  fact  more  permanent  than 
private  property,  more  universal  than  the  selfishness 
of  the  rich  is  the  inability  of  human  nature  to  be  content 
with  what  it  has.  Mankind  is  as  insatiable  as  the  leaky 
jar  which  the  Danaids  were  for  ever  filling  but  which 
was  never  full.  We  are  like  children  who  demand  jam, 
when  served  with  bread  and  butter ;  and  then  when 
given  what  they  ask,  immediately  call  out  for  cake.  Half 
a  century  ago  we  learnt  to  ride  on  wheels  ;  but  no 
sooner  had  we  done  so,  than  v/e  sought  some  automatic 
method  of  propulsion  ;  so  we  have  passed  from  one 
invention  to  another,  until  what  was  once  considered 
a  miracle  of  speed,  now  seems  a  snail's  pace.     Last  of 


THE  PARADOX  OF  PROGRESS     37 

all,  having  tired  of  such  dull  terrestrial  motions,  we 
have  taken  to  ourselves  wings  and  aspire  to  navigate 
the  skies.  Now,  as  we  have  seen,  science  and  invention 
can  do  much  to  lighten  the  task  of  manufacture.  By 
patient  industry  and  forethought  the  business  of 
wheel-making  might  become  mere  child's  play  and 
every  man  might  own  his  cycle  ;  but  if  the  moment 
that  this  has  been  achieved,  man  discovers  a  need  for 
aeroplanes  and  motor-cars  as  well,  he  is  imposing  upon 
himself  a  fresh  and  still  more  arduous  task.  His  energy 
and  enterprise  we  cannot  but  admire,  but  if  he  grumbles 
at  the  trouble  of  producing  them,  we  must  tell  him  that 
he  has  only  himself  to  blame. 

It  is  perhaps  too  frequently  forgotten  that  much 
as  our  capacity  for  production  has  increased,  our 
capacity  for  consumption  has  increased  along  with  it. 
This  is,  beyond  doubt,  both  inevitable  and  right  ; 
but  no  less  inevitable  is  a  corresponding  necessity  for 
work.  Were  we  content  to-day  with  the  simple  fare 
and  scant  comfort  of  the  old  cave-dwellers,  one  hour's 
work  out  of  the  twenty-four  would  easily  suffice  to 
meet  the  call.  Even  to  maintain  the  standard  of  a 
century  ago,  we  might  well  dispense  with  working 
overtime.  But  with  that  standard  no  modern  labourer 
would  ever  be  satisfied  ;  he  expects  and  gets  all  manner 
of  things  his  father  never  dreamt  of.  Not  only  does 
he  keep  a  better  table,  wear  smarter  clothes,  and  furnish 
his  cottage  more  pretentiously  ;  but  as  often  as  not  he 
will  buy  his  evening  paper  to  read  the  racing  results. 
On  Bank  Holidays  he  will  take  a  trip  to  the  seaside. 
Cheap  gramophones  are  to  be  found  in  every  home. 
The  music  halls  are  crowded.  Life  offers  to  him 
numberless  new  opportunities  of  comfort  and  amuse- 
ment ;  and  naturally  enough  he  desires  to  gratify 
these  new  found  wants.  But  sometimes  it  seems  to 
escape  him,  when  he  makes  his  frequent  demand  for 
shorter    hours,    that    to    all     this     growing     plenty 


38  NEW  FALLACIES  OF  MIDAS 

there  must  be  another  side.  Food,  houses,  gramo- 
phones and  papers  do  not  grow  upon  the  hedgerows. 
They  cannot  be  cheap  and  plentnul  unless  somebody 
works  to  make  them  so.  Not  even  the  working  man 
can  have  his  argument  both  ways.  Leisure  and 
pleasure  are  two  excellent  things  ;  but,  being  as  they 
are  mutually  exclusive,  a  choice  must  be  made  between 
them.  If  the  burden  of  production  is  to  be  lightened, 
there  is  one  easy  way  and  that  is  the  limitation  of 
consumption,  and  if  we  cannot  have  all  that  we  want 
without  intolerable  exertion,  we  must  be  content  with 
less.  We  must  learn  to  check  or  correct  the  growth 
of  our  desires,  or  rather  to  discriminate  between  those 
which  should  be  gratified  and  those  which  should  be 
denied.  Real  progress  lies  not  so  much  in  the  mere 
multiplication  of  our  wealth,  as  in  the  proper  discern- 
ment of  what  is  true  wealth  and  what  is  not. 


> 


t 


CHAPTER  V 

LUXURIES  AND  NECESSITIES 

Everyone  would  agree  that  there  are  many  pleasures 
which  it  would  be  better  to  do  without  ;  but  the  agree- 
ment ceases,  when  we  begin  to  consider  which  they  are. 
It  might  be  an  amusing  exercise  to  draw  some  imaginary 
line  between  the  "necessities  "  and  the  "luxuries" 
of  life  ;  but  in  practice  such  a  differentiation  is  as 
useless  as  it  is  impossible.  There  can  be  no  disputing 
about  tastes  ;  and  what  one  man  considers  indispens- 
able to  comfort,  his  neighbour  thinks  an  unjustifiable 
extravagance.  For  what,  are  after  all,  the  "  necessities  " 
of  life  ?  Food  and  drink  certainly  ;  but  how  little 
or  how  much  ?  Clothing  is  a  necessity  to  most  of  us  ; 
but  not  to  the  native  of  Kikuyu.  Houses  are  indis- 
pensable,I  suppose,  in  northern  climates  ;  but  umbrellas, 
clocks,  ornamental  furniture  and  pictures,  we  could 
do  without  every  one  of  these  at  a  pinch  ;  yet  who 
would  discover  a  "  luxury  "  in  the  purchase  of  a  drawing 
room  table  or  a  cheap  print  of  Raphael's  Madonna. 
Or,  again,  if  past  history  is  to  be  considered,  we  find 
no  fixed  or  level  standard.  Now-a-days  a  decent 
drainage  is  considered  a  necessity  ;  but  the  Athenians 
with  all  their  culture  and  aesthetic  taste,  were  not  of 
that  opinion.  And  most  certainly  we  should  not  thank 
some  candid  admirer  of  the  middle  ages  for  reminding 
us  that  life  is  tolerable  without  a  bath. 

The  fact  is  that  the  "  luxury  "  of  one  generation  is 
the  "necessity"  of  that  which  succeeds  it.  What 
the  few  enjoy  to-day  as  a  privilege,  the  many  will 
demand  as  a  right  to-morrow.     Human    beings    are 

39  4 


40  NEW  FALLACIES  OF  MIDAS 

imitative  creatures.  If  my  neighbour  hits  upon  some 
new  convenience  or  ornament  of  life,  I,  when  I  can 
afford  it,  shall  follow  his  example.  So  the  habit 
spreads  till  it  becomes  a  fashion,  until  our  children 
will  never  be  content  to  be  without  it,  and  that  is  how 
the  world  moves  forward.  For  this  reason  it  would  be 
not  merely  idle,  but  positively  dangerous  to  ban  all 
luxury,  or  to  condemn  the  man  who  enjoys  what  others 
lack.  If  nobody  had  ever  for  his  own  convenience 
invented  the  luxury  of  a  bathroom,  our  houses  would 
all  be  bathless  to  this  day.  Somebody  must  take  the 
lead  ;  then  the  rest  will  follow  like  a  flock  of  sheep. 
So  long  then  as  the  present  social  and  economic  order  of 
the  world  continues,  the  forward  march  of  civilisation 
will  depend  mainly  on  the  enterprise  of  individuals 
and  even  the  plutocrat  may  prove  useful  as  an  apostle 
of  progress. 

And  indeed  it  is  no  mere  concession  to  self-indulgence 
that  allows  the  list  of  so-called  necessities  to  lengthen. 
Only  the  savage  lives  purely  for  his  stomach.     Among 
civilised  men  other  unnecessary  tastes  call  for  satis- 
faction ;    and,  as  Plato  said,  a  life  supported  on  a  bare 
margin  of  necessities  would  be  fit  for  nothing    but   a 
"  town  of  pigs."     It  was  never  man's  duty  or  his  desire 
to  rest  content  with  a  minimum  ;    and  the  fulfilment 
of  the  higher  part  of  his  nature  requires  not  the  necess- 
ities alone,  but  a  whole  pantechnicon  of  comforts.     It 
is  a  favourite  maxim  with  philanthropists  that  men 
cannot  be  good  so  long  as  they  are  paupers  ;    and 
altnough  genius  has    sometimes    thriven    under    the 
severest  of  conditions,  the  best  work  is  generally  done 
by  those  who  are  least  handicapped  by  privation  or  dis- 
cornfort.    Most  of  our  own  great  poets  (though  poets  and 
artists  are  popularly  supposed  to  starve)  have  been  men 
of  comfortable  means.     The  nerves  and  health  of  the 
business   man   would   suffer,    if   he   could   not   retire 
nightly  to  some  distance  from  the  town  ;   the  scholar's 


LUXURIES  AND  NECESSITIES  41 

work  is  in  some  measure  dependent  upon  the  comforts 
of  his  study  and  his  fireside  chair  ;  and  no  Prime 
Minister  would  be  efficient  who  was  forced  to  make  his 
own  fire  or  to  black  his  own  boots  in  the  morning.  In 
short,  the  more  we  intend  to  give  the  higher  faculties 
free  play,  the  less  interference  must  they  suffer  from 
the  body.  It  would  indeed  be  an  evil  day  for  man 
when  he  ceased  to  employ  his  hands  and  muscles  ; 
but  he  should  be  master  and  director  of  his  physical 
energies,  not  the  slave  of  his  physical  needs  ;  and,  as 
time  goes  on,  he  will  more  and  more  rely  upon  arti- 
ficial conveniences  and  comforts,  and  eliminate  the 
many  minor  occupations  which  now  encroach  upon  the 
main  business  of  his  life,  and  the  many  trivial  anxieties 
which  distract  his  mind  from  better  and  worthier 
things. 

Yet,  though  "  luxuries  "  may  help  the  individual 
to  attain  sofne  higher  standard  of  usefulness  or  culture, 
it  must  not  be  forgotten  that  his  advantage  is  almost 
inevitably  some  other  person's  loss.  If  the  supply  of 
both  work  and  wealth  were  unlimited,  I  and  my 
neighbour  might  each  of  us  have  plenty,  and  the 
indulgence  of  his  luxurious  habit  need  not  be  made  at 
my  expense.  But,  unhappily,  production  is  not  un- 
limited. The  same  field  cannot  produce  potatoes  for 
him  and  pine-apples  for  me  ;  nor  can  a  workman  make 
boots  and  silver  buckles  simultaneously.  If  then  I 
must  go  hungry  that  he  may  enjoy  dessert,  or  ill-shod 
that  he  may  have  fine  buckles  to  his  shoes,  it  is  not 
so  easy  to  observe  the  precepts  of  the  Tenth  Com- 
mandment. 

This  is  precisely  the  grievance  which  the  necessitious 
poor  may  justly  entertain  against  the  luxurious  rich. 
Even  though  the  latter's  wealth  should  not  be  wasted 
on  mere  personal  enjoyment,  but  wisely  spent  in  the 
service  of  science,  art  or  culture,  yet  none  the  less  the 
many  suffer  (for  a  time  at  least)  by  what  the  few  will 


42  NEW  FALLACIES  OF  MIDAS 

gain  ;  for  wealth  and  labour  which  might  have  gone 
to  the  production  of  necessities  for  the  poor,  will 
have  been  diverted  to  unnecessary  production  for  the 
rich.  When  Mr.  Lloyd  George  was  conducting  his 
famous  land  campaign,  the  correspondence  columns 
in  the  daily  papers  were  filled  with  the  righteous 
indignation  of  the  threatened  land-owners.  On  the 
face  of  things  he  had  some  cause  for  his  complaint. 
Here  was  he,  so  his  defence  ran,  making  of  his  park 
and  garden  an  ornament  to  the  countryside,  advancing 
the  science  of  horticulture  by  his  experiments  with 
pink  carnations,  and  above  all,  providing  work  for  a 
score  of  gardeners  who  would  otherwise  be  thrown 
out  of  employment.  Being  a  benefactor  to  the  com- 
munity on  all  three  scores,  he  bitterly  resented  the  un- 
justified attack  of  an  ungrateful  politician. 

The  answer  to  his  arguments  is  obvious  enough. 
"  If,"  we  should  say,  "  every  man,  woman  and  child 
in  England  has  bread  enough  and  to  spare,  there  is 
no  more  to  be  said,  and  your  claim  to  social  virtue 
may  be  granted.  If  however  (as  is  very  palpably 
the  case),  many  a  child  goes  hungry  because  bread 
is  not  plentiful  or  cheap  enough  to  suit  his  parent's 
pocket,  then  all  your  fine  arguments  are  not  worth  the 
cost  of  printing.  As  for  the  men  who  serve  you,  they 
would  be  employed  just  the  same,  if  your  park  were 
ploughed  up  for  corn  and  your  garden  thrown  into 
allotments.  And  what  is  more,  they  would  be  em- 
ployed to  far  better  purpose.  At  present,  their  labour 
goes  in  the  production  of  peaches  and  carnations  ; 
neither  of  which  will  go  to  fill  a  single  poor  child's 
mouth  ;  but  if  the  land  were  under  crops  there  would 
be  potatoes  or  grain  to  show  for  it  ;  there  would  be 
a  substantial  addition  to  the  world's  supply  ;  and, 
since  bread  and  vegetables  do  not  dissolve  into  nothing- 
ness, somebody  would  be  fed  who  had  previously 
been  stinted. 


LUXURIES  AND  NECESSITIES  43 

The  same  argument  holds  good  of  luxury  in  all  its 
many  forms.  If  the  price  of  imports  is  kept  high, 
because  a  scarcity  of  ships  makes  freight  dues  heavy, 
then  the  Transatlantic  liner  with  its  bedroom  suites 
and  baths  and  tennis  courts  and  promenades  is  a 
crime  against  society.  If,  again,  cheap  motor-buses 
are  badly  needed  to  carry  labourers  to  their  work, 
what  right  has  the  milllionaire  to  occupy  the  mechanic's 
time  in  making  him  a  car.  It  is  difficult  to  see  how  this 
can  be  gainsaid,  or  how  the  sacrifice  of  these  luxuries 
could  fail  to  confer  a  direct  benefit  on  others.  It  is 
too  little  remembered  that  thrift  is  a  pubUc  service 
as  well  as  a  private  virtue.  When  a  man  saves  a 
hundred  pounds  and  makes  a  new  investment,  he  does 
something  more  than  increase  his  own  personal  income. 
He  also  benefits  the  community  at  large.  The  benefit 
is  more  obvious  and  direct  if  he  invests  his  money 
in  a  companj^  which  ministers  to  the  public  needs  by 
making  motor  cars  or  merchant  ships.  But  whatever 
be  the  form  of  investment  he  prefers,  he  is  adding  to 
the  sum  of  the  world's  capital,  and  thereby  increasing 
the  total  of  the  world's  production  ;  and  that  is  after 
all  one  of  the  simplest  ways  of  making  the  world 
happy. 

'\\'e  need  to  think  of  the  world  more  than  we  do  as  one 
great  household  which  is  affected  for  good  or  for  ill 
by  the  thrift  or  extravagance  of  every  member.  The 
father  of  a  family  would  be  blamed  for  spending  his 
wages  upon  drink,  if  this  meant  that  his  children 
would  go  short  of  bread  and  butter.  On  the  other 
hand,  he  would  be  acting  almost  as  foolishly  if  he 
failed  to  keep  himself  in  food  and  clothing  adequate 
to  the  maintenance  of  his  own  efficiency  or  position. 
Certainly,  if  he  can  afford  to  do  so  without  stinting  his 
family,  it  is  a  plain  duty.  He  has  in  short  to  steer 
a  difficult  course  between  conflicting  claims,  and  he 
must  constantly  be  balancing  one  good  against   the 


44  NEW  FALLACIES  OF  MIDAS 

other.  The  same  is  true  of  the  relation  of  each  indi- 
vidual towards  the  social  family.  He  too  must  balance 
the  interests  of  others  against  the  interests  of  self. 
The  two  often  seem  to  be  utterly  opposed  ;  and  they 
can  be  brought  into  harmony  only  by  the  knowledge 
that  each  individual  has  a  definite  part  to  play  as  a 
member  of  society  and  a  citizen  of  the  world.  It 
is  his  duty  to  play  that  part  as  usefully  and  efficiently 
as  he  can  ;  and  whatever  enables  him  to  do  so,  he  is 
well  within  his  rights  in  claiming.  If  he  works  better 
for  some  relaxation,  let  him  by  all  means  visit  the 
theatre  or  the  golf-course  ;  if  he  can  talk  or  write  or 
think  the  better  for  wide  reading,  let  him  buy  books  ; 
if  experience  of  the  world  will  broaden  his  judgment 
and  his  interests,  let  him  travel.  The  indulgence  of 
■  these  tastes  (if  they  are  within  the  compass  of  his 
means)  are  at  least  a  justifiable  extravagance  ;  for 
though  they  involve  some  drain  upon  the  labour 
and  resources  of  the  community,  they  confer  an  ade- 
quate benefit  in  return  ;  a  man,  who  is  cheerful  and 
intelligent  and  open-minded,  is  at  least  not  failing  in 
one  duty  to  his  fellow-men.  On  the  other  hand, 
pleasures  which  lead  nowhere,  which  take  the  bread 
out  of  other  people's  mouths,  or  which  squander  the 
fruit  of  other  people's  work  without  any  such  ulterior 
compensation,  are  indefensible,  at  best  they  are  a  selfish 
frivolity  ;   at  worst  they  are  a  criminal  waste. 

In  such  matters  it  is  of  course  impossible  to  lay 
down  any  fixed  code  or  canon,  or  to  say  which  luxury 
is  justifiable  and  which  is  not.  Every  man  must 
judge  for  himself  according  to  his  own  nature  and 
according  to  his  own  ideals.  For  one  man  a  distant 
week-end  journey  may  be  time  and  money  well  spent ; 
for  another  the  pleasure  and  value  of  the  visit  might 
be  altogether  incommensurate  with  the  cost.  In  order 
to  estimate  the  advantage  or  disadvantage  of  each 
expenditure,   we   must   know   not   merely   the    whole 


LUXURIES  AND  NECESSITIES  45 

circumstances  of  the  individual's  life  and  character, 
but  the  economic  condition  of  the  whole  world  as  well. 
To  set  a  true  value  on  every  new  departure  from  the 
normal  standard  of  life,  we  should  require  the  gift  of. 
prophecy  ;  for  only  if  we  were  allowed  to  look  into 
the  future  could  we  tell  whether  (all  things  considered) 
the  new  departure  will  have  assisted  progress  or  re- 
tarded it,  or  whether  the  direction  of  energy  into  fresh 
channels  will  have  been  a  benefit  or  a  waste.  In  such 
ignorance  of  future  developments  men  once  debated 
and  doubted  the  value  of  the  railway  train,  and  even 
now  who  can  tell  if  the  course  which  modern  civilisation 
is  following  is  the  right  one,  and  whether  our  growing 
desire  for  novelty  and  excitement,  our  preference  for 
town  life  over  country  life,  and  our  restless  pursuit  of 
luxuries  at  the  expense  of  leisure  will  make  for  the 
ultimate  happiness  or  misery  of  mankind  ?  The 
future  is  matter  for  guess  work,  and  we  must  grope 
forward  following  our  instincts,  but  still  more  reaching 
forward  to  our  best  ideals.  We  must  first  form  in  our 
minds  some  clear  conception  of  man's  destiny,  and 
know  what  we  would  have  him  be  ;  and  then  perhaps 
it  may  be  less  difficult  to  discriminate  between  his 
desires  and  tell  which  is  good  to  satisfy  and  which  to 
refuse. 

Economic  science  must  remain  ill-defined  and  in- 
conclusive if  it  considers  only  the  satisfaction  of 
appetites  or  the  regulation  of  supplies  and  there  stops 
short.  We  seek  wealth  wherewith  to  satisfy  our  needs, 
since  we  believe  that  this  will  help  to  make  us  happy : 
and  just  because  happiness  is  a  moral  and  not  a 
material  state,  we  cannot  neglect  or  exclude  the  moral 
issues  which  underlie  the  production  and  consumption 
of  wealth.  It  is  no  profit  to  a  man,  if  he  gain  the 
whole  world  and  lose  his  own  soul  ;  and  in  the  last 
resort,  the  getting  or  the  spending  of  wealth  is  nothing 
except  as  it   affects  men's   character  for  good   or  ill. 


46  NEW  FALLACIES  OF  MIDAS 

Labour  is  wrong  which  serves  but  to  satisfy  some 
vicious  craving  ;  and  our  desires  are  wrong  too,  if 
other  men,  that  we  may  be  satisfied,  must  engage 
on  work  which  undermines  the  health  or  destroys 
the  soul.  So  long  as  even  one  member  of  the  community 
is  deliberately  sacrificed  to  the  pleasure  or  gratification 
of  the  rest,  we  cannot  claim  to  have  reached  the 
ideal  state  ;  and  the  goal  of  political  economy  will 
only  have  been  won,  when  every  human  being  alive 
is  both  wise  and  happy,  and  has  enough  to  win  and 
to  maintain  a  sound  mind  in  a  sound  body. 


CHAPTER  VI 

EXTRAVAGANCE  AND  WASTE 

Before  however  we  trj^  to  picture  the  state  of 
society  which  we  desire  to  see  estabhshed  and  towards 
which,  so  far  as  we  may,  we  must  endeavour  to  shape 
our  future  course,  it  is  worth  while  to  take  stock  of 
our  present  condition  of  the  world,  and  to  examine 
more  closely  some  types  of  production  which  are 
without  doubt  wasteful  or  deleterious  to  mankind. 
I  say  production  (though  clearly  the  consumer  who 
demands  the  goods  is  the  primary  cause  of  their 
manufacture)  partly  because  production  precedes 
consumption  and  is  therefore  more  easy  to  regulate 
at  the  source,  partly  because  the  man  who  produces 
or  purveys  a  harmful  luxury  is  often  as  much  to  blame 
as  the  man  who  buys  it.  Human  imagination  is  so 
feeble  that  we  seldom  know  what  we  want  until  we 
see  it  ;  and  human  nature  is  so  weak  that  when  we 
have  seen  we  often  lack  strength  to  refuse.  One  sets 
the  fashion  and  others  follow  ;  and  the  consumer's 
gullibility  becomes  the  producer's  opportunity  ;  so 
the  one  may  do  as  much  harm  by  his  haste  to  make 
money  as  the  other  by  his  readiness  to  spend  it. 

It  is  a  common  practice  with  economists  to  divide 
labour  into  two  classes,  productive  and  unproductive. 
This  classification  is  clearly  not  to  be  taken  in  its 
literal  sense  ;  for  absolutely  unproductive  labour 
is  a  contradiction  in  terms  ;  unless  it  were  the  building 
of  a  house  like  a  card  castle  simply  in  order  to  knock 
it  down  again,  such  a  thing  does  not  exist  ;  all  labour 
is  directed     to   some    end    and     therefore    produces 

47 


48  NEW  FALLACIES  OF  MIDAS 

something.  The  true  meaning  then  of  the  distinc- 
tion must  be  this ;  some  forms  of  labour  tend  to 
the  increasing  of  man's  real  wealth,  these  are  pro- 
ductive ;  others  on  the  contrary  to  wasting  or  destroy- 
ing it,  these  are  unproductive.  The  most  obvious 
instance  of  such  destructive  or  unproductive  labour 
is  the  manufacture  of  military  material.  From  a 
national  point  of  view  indeed  this  seems  to  satisfy  a 
legitimate  desire  for  peace  and  safety  ;  and  nothing 
is  more  necessary  than  to  be  well  armed,  if  there  is 
a  bellicose  neighbour  across  your  border  ;  but  for  all 
that  nothing  does  more  to  fritter  away  the  wealth  of 
the  world.  People  talk  sometimes  as  though  the 
building  of  dreadnoughts  or  the  casting  of  howitzers 
were  a  blessing  in  disguise,  because  forsooth  it  gives 
employment  to  so  many  thousand  artisans.  There 
could  be  no  more  pernicious  fallacy  ;  the  labour  of 
this  vast  host  of  men  could  be  put  to  some  far  better 
use  than  the  manufacture  of  instruments  which  are 
intended  for  no  other  purpose  than  to  blow  our 
neighbour's  towns  into  the  air  or  to  send  our  neigh- 
bours' ships  (built  also  at  great  expenditure  of  pains 
by  them)  to  the  bottom  of  the  sea.  The  men  who 
can  build  a  man-of-war  can  also  build  a  merchant 
ship,  and  lathes  which  can  turn  shells,  can  turn  engine- 
shafts  or  cylinders  too.  To  convert  these  warlike 
preparations  into  peaceful  industries  might  once  have 
seemed  a  difficult  matter  ;  but  four  years  of  war  have 
shown  us  how  swift  a  conversion  may  be  possible  in 
a  contrary  direction,  and  if  we  can  beat  our  plough- 
shares into  swords  so  easily,  we  can  surely  find  little 
hindrance  to  beating  them  back  again.  The  trans- 
formation could  be  achieved  ;  and  if  it  were,  an  immense 
economy  would  result  from  it.  The  nation  would  save  I 
know  not  how  many  millions  in  taxation  ;  and  we 
should  be  free  to  invest  all  those  saved  millions  in  the 
building  of  merchant  ships  or  machinery  or  whatever 


EXTRAVAGANCE  AND  WASTE  49 

we  need.  Under  the  conditions  of  the  years  before 
the  war,  the  peoples  of  Europe  have  resembled  as  it 
were  the  builders  of  Jerusalem,  who  worked  with 
trowel  in  one  hand  and  sword  in  the  other,  a  posture 
equally  ill-adapted  for  good  masonry  or  prosperous 
industry.  To  rid  ourselves  of  this  handicap,  we  must 
effect  a  complete  reversal  of  the  policies  and  relations 
of  all  the  peoples  of  the  world  ;  and  even  now  who  can 
say  if  such  a  miracle  be  possible  ?  But  if  there  ever 
comes  a  day  when  mankind  shall  be  free  to  get  both 
hands  to  the  work,  an  intolerable  burden  will  have  fallen 
in  an  instant  from  our  shoulders. 

There  are  other  trades  less  honourable  and  if  anything 
more  deadly  than  the  trade  of  war.  To  name  but  one, 
there  is  the  manufacture  of  spirits  and  drugs  that  under- 
mine the  health  and  morality  of  whole  nations. 
Opium  and  absinthe  have  wrought  more  havoc  than 
many  wars,  and  the  suppression  of  vodka  among  the 
Russians  has  added  as  much  to  the  national  happiness 
as  it  can  ever  add  millions  to  the  national  wealth.* 
But  out  of  the  bulk  of  the  world's  production  there  is 
comparatively  little  that  can  be  called  down-right 
destructive  ;  far  more  misdirected  energy  is  wasted 
upon  the  manufacture  of  goods  which  are  neither 
directly  harmful  nor  directly  beneficial  but  simply 
negative  in  their  effect.  Now,  though  these  do  not 
actually  destroy  the  fruit  of  other  men's  labour  ;  neither 
do  they  add  in  the  smallest  degree  to  men's  efficiency 
or  strength  or  skill.  In  other  words  they  are  unpro- 
ductive. Productive  labour  on  the  other  hand  does 
essentially  add  to  man's  efficiency  and  so  pave  the  way 
for  further  production.  It  yields  a  return,  so  to  speak, 
at  compound  interest,  building  up  man's  strength  for 
fresh  labours,  and  endowing  him  with  skill  or  knowledge 
for  fresh  activities.  The  making  of  food  and  clothing 
is  productive  labour  ;    for  though  the  food  is  consumed 

*  There  are  more  than  ever  drunk  now  (June,  1918). 


50  NEW  FALLACIES  OF  MIDAS 

and  the  clothes  wear  out,  yet  we  have  something  to 
show  for  them.  The  bread  which  builds  muscle  and 
the  clothes  which  keep  a  man  dry  and  fit  and  warm, 
render  him  more  capable  for  his  day's  work,  and  so 
enable  him  to  take  his  share  in  fresh  production. 
Even  less  material  satisfactions,  such  as  art  or  social 
intercourse  or  sport,  leave  some  permanent  result 
behind.  Pleasures  which  afford  wholesome  recreation 
to  tired  body  or  jaded  mind  are  far  from  wasted  ;  pictures 
music,  poetry  and  learning  store  the  mind  with  thoughts 
and  memories  and  high  ideals  which  are  a  possession 
beyond  price  and  wealth  for  ever.  But  contrast 
these  with  the  fruits  of  "  unproductive  "  labour,  un- 
wholesomie  food  which  gratifies,  but  does  not  feed, 
empty  pleasures  which  degrade  and  exhaust  instead  of 
ennobling  and  reviving,  flashy  ornaments  which  have 
no  saving  quality  of  permanence  or  grace.  All  these 
are  so  much  honest  labour  and  good  material  thrown 
away. 

These  satisfactions  which  do  not  satisfy,  and 
pleasures  which  have  no  permanent  effect,  have 
been  common  in  every  age  but  perhaps  in  none 
so  much  as  ours.  The  very  facility  and  variety  of 
modern  mechanical  production  has  flooded  the  market 
with  meritricious  and  inexpensive  articles,  with  the 
result  that  the  standard  of  workmanship  is  lowered 
and  public  taste  degraded.  Vulgar  taste  is  the  pet 
extravagance  of  the  centur}^  The  shops  are  full  of 
goods  which  are  cheap  and  nasty,  yet  tempting  through 
their  very  cheapness.  The  poorer  the  buyer  the  greater 
the  fascination  which  they  will  exercise  upon  him. 
In  East  London  a  lad  will  buy  half  a  dozen  shoddy 
cloth  caps  in  as  many  months,  though  the  combined 
cost  of  the  six  will  far  exceed  the  price  of  a  single  good 
one.  It  is  true  the  manufacture  of  the  cheap  inferior 
goods  is  in  many  ways  a  benefit  to  the  poor  and  is 
not  in  the  strict  sense  "unproductive."     They  satisfy 


EXTRAVAGANCE  AND  WASTE  51 

indeed,  but  the  satisfaction  is  transitory  or  superficial 
and  their  manufacture  represents  wasted  time  and 
wasted  trouble,  because  it  is  not  the  best  labour  which 
men  are  capable  of  performing,  and  it  is  never  good 
economy  to  give  your  second  best.  The  demand  for 
them  encourages  hurried,  careless  or  mechanical  work, 
and  because  such  work  is  always  liable  to  be  under- 
paid (the  trade  in  cheap  shirts  and  ready  made  suits 
is  notoriously  conducted  on  "sweated"  labour),  the 
efficiency  of  the  worker  deteriorates  and  the  quality 
of  his  future  production  suffers  accordingly.  The 
manufacture  of  half  the  goods  which  we  see  upon 
the  counters,  whether  it  be  done  by  hand  or  by  machine, 
is  soul-destroying  work  which  it  profits  no  man  to 
perform.  And  upon  the  consumer  himself  the  craze 
for  cheapness  has  an  influence  which  is  anything  but 
good.  He  gets,  it  is  true,  "  a  lot  for  his  money,"  but 
he  does  not  in  the  long  run  profit  by  the  bargain. 
In  the  first  place,  quantity  is  no  true  equivalent  for 
loss  of  quality.  Boots  made  out  of  paper  will  not 
wear,  and  the  second  rate  watch  takes  a  heavy  toll 
in  frequent  visits  to  the  mender.  The  moral  effect 
is  even  worse  ;  for  the  lure  of  fashionable  smartness 
blinds  the  eyes  to  true  utility  and  prevents  us  from 
setting  a  just  value  upon  the  strength  and  beauty  of 
good  workmanship.  Lastly,  it  encourages  thrift- 
lessness  under  the  semblance  of  thrift.  The  behaviour 
of  ladies  at  a  "  sale  "  is  an  epitome  of  human  weakness 
in  this  respect.  Because  we  sight  a  "  bargain  "  we 
buy  what  we  do  not  really  want ;  or  at  any  rate  what 
we  cannot  afford.  We  rent  pretentious  villas  built 
of  lath  and  plaster  and  adorned  with  hideous  terra- 
cotta tiles  ;  we  fill  them  with  furniture,  not  such  as 
our  forefathers  once  made  to  out-last  centuries,  and  to 
be  handed  as  an  heirloom  to  generations,  but  miserable 
pinchbeck  stuff  that  lasts  a  twelve-month  and 
then   falls   speedily  to  pieces  ;  we   drink  wine  manu- 


52  NEW  FALLACIES  OF  MIDAS 

factured  from  currants,  hang  artists'  "  pot-boilers  " 
upon  our  walls,  dine  off  imitation  willow-pattern 
plates,  and  all  to  make,  as  we  fancy,  a  brave  show, 
and  practice  upon  the  world's  credulity.  There  is 
scarcely  a  feature  of  our  modern  life  but  bears  witness 
to  the  crimes  and  follies  committed  in  the  name  of 
cheapness. 

There  is  one  other  form  of  waste  which  in  comparison 
with  this  last  might  seem  excusable  or  even  merit- 
orious ;  I  mean  the  waste  which  occurs  in  production 
through  the  use  of  superfluous  labour  or  the  expend- 
iture of  unnecessary  material.  We  should  naturally 
applaud  the  man  who  lavishes  superfluous  energy 
upon  his  work  from  pure  excess  of  zeal.  But  no 
praise  is  due  when  he  does  it  from  love  of  gain  or 
from  mere  stupidity.  We  should  call  it  culpable 
waste  to  employ  two  men  to  produce  a  thing  when 
a  single  man  could  produce  it  just  as  well ;  yet  in 
one  way  or  another  most  manufacturers  are  guilty 
of  this  unbusinesslike  proceeding.  The  most  noticeable 
and  obvious  instance  of  such  a  practice  is  the 
excessive  use  of  advertisement.*  It  may  be  needful, 
as  things  are,  to  advertise,  all  is  part  of  the  price  we 
pay  for  the  questionable  advantages  of  a  competitive 
market.  But  advertisement  on  the  present  scale 
adopted  is  far  in  excess  of  what  is  necessary  for  the 
simple  purpose  of  giving  information,  and  (though 
experts  differ  as  to  the  exact  amount  spent  yearly  in 
this  way)  it  unquestionably  represents  an  enormous 
addition,  both  in  labour  and  material,  to  the  total  cost 
of  production.  The  consumer  benefits,  it  is  true,  in  so 
far  as  his  attention  is  attracted  or  his  interest  artificially 
aroused  ;  but  even  this  is  a  doubtful  blessing,  and  he 
little  guesses  how  dear  he  has  to  pay  for  it.     Some 

*On  the  other  hand,  advertisement  in  moderation  is  not  merely- 
legitimate,  but  necessary.  People  must  have  information  :  and  the 
spreading  of  information,  if  properly  organised,  is  a  real  economy. 


EXTRAVAGANCE  AND  WASTE  53 

clever  quack  concocts  a  new  pill,  from  harmless,  and 
common-place  ingredients  ;  and  then  trumpets  forth 
his  great  discovery  in  immoderate  terms.  His  grate- 
ful dupes  flock  in  their  thousands  to  the  chemist's 
shop  and  buy  it,  and  the  pill,  for  aught  we  know,  may 
effect  a  multitude  of  cures  ;  but  would  it  have  effected 
less  if  newspaper  compositors  had  been  spared  the 
trouble  of  setting  up  a  hundred  lines  of  print  ex- 
tolling the  virtues  of  the  pill,  or  if  some  popular  black 
and  white  artist  of  the  staff  of  Punch  had  never  been 
paid  to  prostitute  his  genius  by  designing  humorous 
appeals  to  supposed  sufferers,  or  drawing  pathetic 
portraits  of  anaemic  children  ?  Has  the  drug  acquired 
new  properties,  because  carpenters  and  bill-posters 
are  set  to  disfigure  the  country-side  and  make  our  streets 
more  hideous  b},  the  erection  of  preposterous  hoardings  ? 
All  this  labour,  when  we  come  to  think  of  it,  benefits 
nobody  ;  and  if  it  be  a  necessary  feature  of  com- 
petitive trading,  so  much  the  worse  for  competition, 
and  so  much  worse  above  all,  for  the  unfortunate 
consumer.  Yet,  oddly  enough  he  never  seems  to  realise 
what  an  immense  tax  advertisement  imposes  upon 
himself.  He  imagines  perhaps  that  when  Messrs.  X. 
present  him  with  sample  tins  of  cocoa  or  free  catalogues 
of  their  summer  sale  they  do  so  at  their  own  expense. 
But  if  he  reflected  for  a  moment  he  would  see  that 
Messrs  X.  are  out  to  make  money.  They  require  a 
clear  profit  over  the  working  expenses  of  their  business, 
and  when  they  expend  half  as  much  again  as  the  cocoa 
costs  upon  the  advertisement  of  its  qualities,  they 
must  of  necessity  raise  its  price  in  proportion.  In 
fine,  those  columns  in  the  Daily  Mail  and  those 
hoardings  erected  in  the  streets  are  paid  for  some- 
how, and  in  the  last  resort  the  money  comes  out 
of  the  buyer's  purse.  We  are  a  short-sighted,  long- 
suffering  people,  and  we  take  all  this  as  a  matter 
of    course.       Yet    if    a    gentleman    kept    a     trained 


54  NEW  FALLACIES  OF  MIDAS 

journalist  in  the  kitchen  that  while  the  cook  was 
preparing  the  dinner,  he  might  be  composing  a 
seductive  7ncnu  to  induce  the  guests  to  partake  of 
her  delicacies  we  should  write  him  down  as  a  fool 
or  worse. 

But  business  methods  which  pass  for  enterprising, 
smart  and  up-to-date  are  not  the  only  or  the  chief 
cause  of  dissipated  energy.  Far  more  waste  is  caused 
by  methods  which  on  the  contrary  are  lax,  old-fashioned 
and  inefficient.  Our  industries  are  often  regulated  upon 
a  system  which  is  twenty  years  behind  the  times. 
In  many  factories  the  machinery  in  use  is  of  a  clumsy 
and  antiquated  type  ;  and  if  here  and  there  a  really 
up-to-date  machine  is  to  be  found,  it  will  hail  as  likely 
as  not  from  the  United  States.  Our  railways  are  run 
without  any  strict  notion  of  economy.  Half  their 
rolling-stock  is  kept  standing  idle  from  one  year's 
end  to  the  other  ;  and  it  has  even  been  asserted  that 
the  average  distance  covered  by  a  single  truck  is  not 
much  more  than  one  mile  per  diem.*  Automatic 
methods  of  loading,  which  might  be  installed  at  no 
great  outlay  and  which  would  more  than  pay  their 
cost  in  the  economy  of  human  labour,  are  not  seriously 
considered.  There  is  a  similar  scope  for  reformed 
methods  and  better  organisation  in  almost  every 
department  of  industry  ;  but  perhaps  the  most  startling 
and  prodigious  waste  arises  not  so  much  in  the  process 
of  production  or  manufacture  but  in  the  course  of 
sale.  The  retail  trade  is  not  in  itself  an  unproductive 
form  of  labour.  Wealth  is  by  definition  that  which 
satisfies  my  needs  ;  and  my  needs  are  not  satisfied 
by  a  heap  of  coal  at  a  Welsh  pit-head  or  raw  tobacco 
in  Virginia.  The  middle  man  who  delivers  the  one  at 
my  house  and  sells  me  the  other  across  the  counter 

*  The  estimate,  which  in  the  absence  of  statistical  returns  by  the 
companies  themselves  cannot  be  final,  is  as  follows  : — 1.57  miles  per 
day  at  20  miles  per  hour,  i.e.,  under  5  minutes  per  day  in  effective 
motion  per  waggon. 


EXTRAVAGANCE  AND  WASTE  55 

is  rendering  me  as  important  a  service  as  the  miner 
who  wins  the  coal  out  of   the  pit,  or  the   dealer  who 
manufactures    a    cigar.     Goods   must   be    handled   in 
large   consignments   by   wholesale   dealers,    and   then 
passed  on  by  them  to  the  retail  dealers  for  distribution. 
Each  performs  a  useful  and  necessary  part  and  rightly 
claims  a  profit  on  the  deal.     But  it  is  neither  necessary 
nor  useful  that  out  of  a  population  of  twenty   million 
workers  two  million  should  be    engaged   in    such   an 
occupation.     That  is  to  say  that  every   five  families  in 
the   country   employ  one  person  thus  to  wait  upon 
their    wants.       The   links    in    the    chain    connecting 
the  consumer  and  the  original  producer  have  in  short 
been  multipHed  beyond  all  reason,  and  the  facts  have 
only  to  be  stated  to  appear  ridiculous.     It  was  the 
natives  of  the  Hebrides  who  according  to  Dr.  Johnson's 
epigram  earned  a  precarious  livelihood  by  taking  in 
each  other's  washing.     But  it  has  remained  for  the 
"  nation  of  shopkeepers  "  to  discover  the  more  excellent 
method  of  waiting  on  one  another  across  the  counter. 
But  the   indictment  does  not  end  there.     After  all 
these  years    of   science    and   invention   there   is   still 
scarcely  a  trade  in  which  human  energy  is  not  squan- 
dered, scarcely  a  job  which  could  not   be  performed 
with  less  effort  and  more  efficiency  by  taking  thought 
a  little.     We  have  yet  to  study  the  use  and  capabilities 
of  the  human  instrument  as  closely  as  we  calculate 
the  power  of  inanimate    machines :    and    here  again 
there  is    much    that    America    can    teach    us.      Ever 
smce    the    first    experiments    were    made    by    James 
Taylor,    of   Pennsylvania,   over  thirty  years  ago,  the 
methods  known  as  Scientific  Management   have   there 
spread    rapidly.     Taylor   himself   began    his   tests   in 
loading  pig  iron.     He  first  selected   men  of  suitable 
physique  :    then  he  timed  them  at  their  work,  varying 
the  periods  of  activity  and  rest  until  he  had  ascertained 
the     most     effective     combination.     His     deductions 


56  NEW  FALLACIES  OF  MIDAS 

drawn,  he  was  allowed  to  put  them  into  practice  at 
the  Bethlehem  steel  works  :    and  at  the  end  of  some 
three  years,  the  experiment  has  attained  the  following 
remarkable  results.     In  yards  where  400  to  600  men 
had  been  hitherto  employed,  140  now  sufhced.     Each 
man  was  handling  ten  to  fifty-nine  more  tons  per  diem  ; 
and  his  daily  wage  was  increased  by  nearly  seventy 
per  cent.     Taylor's  idea  spread  :    one  of  his  followers 
made   similar   experiments  in    bricklaying.     He    dis- 
covered  the   ideal   height   for    the    mortar   box    and 
brick  pile  ;    he  designed  an    adjustable    scaffold  :    and 
at  last  by  these  and  other  devices  he  relieved  the 
labourer  of  so  much  superfluous  exertion    in   bending 
down  and  straightening  up,  in  sorting  out  the  bricks 
and  turning  them  in  his  hand,   that  the  number  of 
movements  that  went  to  the  laying  of  a  brick  were 
reduced  from  thirteen  to  five,  and  the  tale  of   bricks 
laid  by  a  single  workman  in  an  hour  was  practically 
trebled.     We  need  not  follow  the  history  of  the  method 
into  other  trades.     Enough  has  been  said  to  show  that 
scientific   management   may   work    a   real   revolution 
in  industrial  output.     It  has,  no  doubt,  its  dangers  as 
well  as  its  advantages.     Too  great  a  tax  may  be  put 
upon  the  workers'  powers  :   the  work  itself  may  become 
too  stereotyped  and  too  monotonous  :    and  in  general 
the  whole  system  seems  open  to  the  charge  that  it 
treats  the  human  being  too  much  as  a  machine  and 
leaves  too  little  to  his  own  initative.     The  antidote 
is  not  far  to  seek.     True  scientific   management    will 
study  psychology  as  well  as  statistics.     It  will  consider 
human    needs    as    well    as    human    capacities.     And 
it  will  give  individuality  full  play,  because  the  best 
work  demands  it.     At  any  rate  it  is  clear  that  much 
purposeless  waste  of  effort  now  goes  on  which  careful 
regulation  and   adaptation  could  prevent.     Problems 
of  man  power  are  not  confined  to  war  :    but  war  may 
have  taught  us  a  better  and  wiser  use  of  it :    and  when 


EXTRAVAGANCE  AND  WASTE  57 

we  have  learnt  the  lesson,  we  may  count  upon  a 
sure  reward.  The  day  will  come  when  every  labourer 
will  be  not  merely  more  efficient  in  his  work,  but  more 
prosperous,  more  leisured,  more  contented.  It  is 
a  fact  worth  noting  that  wherever  the  Taylor  system 
has  been  introduced,  strikes  and  labour  troubles  are 
said  to  be  altogether  unknown.* 

Habit  is  strong  ;    and  to  remedy  this  state  of  things 
will  take  many  years  and  much  careful  organisation. 
But  amongst  other  things  the  war  has  proved   a  great 
awakener ;     and  little   by  little  the  forces  of    sound 
business  and  true  economy  will  probably  prevail  over 
our  haphazard  and  extravagant  methods.     Already  the 
small  shopkeeper  is  struggling  hard  in  competition  with 
the  great  stores  which  traffic  upon  a  larger  and   less 
wasteful  scale.   Our  industries  too,  are  waking  up  ;  their 
leaders    are   beginning   to   put   their   house   in   order. 
Science  has  now  become  the  battle-cry  of  commerce, 
and   with   better   organisation    and   more   up-to-date 
equipment  our  factories  will  outstrip  all  previous  records 
of  production.     There   are   signs   too   that   the   other 
manifold  abuses  of  our  economic  system  will  presently 
be    reformed.     The     thriftless     and     selfish     use     of 
riches    will   be   curbed  ; — let   us   hope  by   men's  own 
voluntary  sacrifice   and  their  sense   of  public   duty  ; 
but  if  not,  then  it  will  be  done  by  presure  from  without. 
The  patience  of  democracies  is  not  unlimited  ;   and  the 
will  of  the    majority  is  found   to   prevail  in  the  end  ; 
and  if   the   cupidity   and   self-indulgence   of  the  few 
continues  to  waste  the  wealth   which  is   vital  to  the 
welfare   and   progress   of   many,    then   the   state   has 
many  weapons  ready  to  her  hand.     If  land  is  witheld 
from   profitable    cultivation  for   motives   of  financial 
gain  or  private  pleasure,  then  the  law  may  one  day 

♦Concerning  the  whole  system  see  "  The  Principles  of  Scientific 
.Management,"  F.  VV.  Taylor  and  "  Psycholosiy  and  Industrial 
Efficiency,"  Hugo  Miinsterberg. 


58  NEW  FALLACIES  OF  MIDAS 

intervene  ;  heavy  taxes  may,  if  needful,  be  imposed 
upon  the  owner  ;  or  if  that  is  not  enough,  there  is 
confiscation  as  a  last  resource ;  which  as  it  were 
by  a  stroke  of  the  pen  would  convert  pleasure  parks 
into  corn-fields  and  shooting  moors  into  timber  forests. 
Railways,  coal-mines  and  even  factories  may  one  day 
be  taken  out  of  private  hands  and  run  in  the  interests 
of  the  whole  community.  Many  experiments  of  this 
sort  are  already  within  sight  ;  some  have  actually 
been  attempted.  We  have  fallen  indeed  under  the 
spell  of  the  Socialist  Gospel,  and  being  blinded  by  the 
dazzling  promise  of  democracy  we  look  to  her  to  per- 
form miracles  and  remove  great  mountains.  But 
let  us  not  be  deceived  ;  if  we  pin  our  faith  on  legislation 
it  will  surely  fail  us  yet,  and  our  goal  will  seem  as  far 
away  as  ever.  It  is  easy  to  confiscate;  it  is  less 
easy  to  create.  The  salvation  which  we  seek  must  be 
sought  in  the  change  of  man's  own  self  and  not  in  the 
mere  reform  of  institutions.  No  act  of  Parliament 
can  make  a  people  good  ;  neither  can  it  make  them 
truly  rich  or  truly  happy.  By  compulsion,  you  may 
check  waste,  eliminate  extravagance,  organise  in- 
dustry and  ease  the  dead  weight  of  man's  necessary 
toil  ;  but  there  the  operation  of  compulsion  ceases  ; 
it  can  never  cultivate  in  the  producers  the  lively  spirit 
of  invention,  nor  a  pride  in  honest  craftmanship  ;  it 
can  never  teach  the  consumers  to  prefer  good  work 
to  cheap  work,  nor  to  set  quality  before  quantity 
and  satisfactions  which  are  solid  and  beneficial  before 
those  that  are  frivolous  and  worthless.  This  change 
can  only  come  by  the  gradual  education  of  men's 
tastes,  and  intellects  and  consciences,  never  by  the 
drafting  of  rules  and  regulations.  Compulsion  alone 
is  powerless  to  realise  man's  highest  destiny  and  his 
best  ideals,  nor  will  it  avail  in  ten  thousand  years 
to  unlock  the  gates  and  people  the  streets  of  the  fabled 
city  of  Utopia. 


CHAPTER  VII 
UTOPIA 

(i.). 

What  society  will  be  like,  and  how  man  will  live  in  the 
days  when  all  are  wise  and  happy,  has  been  the  therae 
of  many  a  philosopher,  from  Plato  and  Sir  Thomais 
More  down  to  Mr.  H.  G.  Wells.  As  is  to  be  xpected 
no  two  of  them  are  agreed  together  ;  for  it  is  impossible 
to  say  for  certain  what  posterity  will  want  or  perhaps 
even  what  it  ought  to  want  ;  and  at  best  we  can  only 
guess.  Nevertheless  such  guess-work  has  its  purpose 
and  its  uses  ;  for  did  we  not  have  some  notion  whither 
we  are  bound,  how  could  we  tell  the  road  ?  There  are 
times  in  the  world's  history  (and  this  present  may  well 
be  one)  when  we  stand  doubtfully  at  parting  ways 
and  when  we  must  try  to  discern  which  of  two  roads 
will  lead  us  to  our  goal.  We  are  tempted  naturally 
to  take  the  more  direct  and  then,  too  late  may  be,  we 
shall  discover  that  the  road  we  took  was  a  wrong 
turning  and  the  more  devious  and  difficult  was  the  right 
one  after  all.  Therefore,  to  draw,  if  only  in  imagination, 
the  lines  of  our  ideal  society,  is  but  to  mark,  as 
it  were,  our  destination  on  the  map  ;  yet  with  this 
difference  ;  in  the  map  the  country  behind  us  and 
before  us  is  equally  explored  ;  in  the  chart  of  human 
history  only  the  past  is  certain,  what  shall  be  can 
only  be  conjectured  from  what  has  been  and  what  is. 
So,  from  the  start  we  must  assume  (not  blindly  indeed, 
but  with  good  reason)  that  the  principles  which  held 
good  yesterday  and  to-day  will  hold  good  to-morrow 
also ;    and   that   however  custom    and    circumstance 

59 


6o  NEW  FALLACIES  OF  MIDAS 

may  alter,  the  instincts  and  ideals  of  human  nature 
will  in  essence  remain  unchanged. 

Among   all   the   pictures   wherein   men   have   fore- 
shadowed the  coming  of  that  ideal  State  towards  which 
we  all  hope  the  world  is  moving,  not  the  least  daring,  and 
yet  perhaps  the  most  truly  and  imaginatively  drawn, 
is  the  work  of  William  Morris.     No  student  of  political 
economy  can  read  his  "  News  from  Nowhere  "  without 
a   genuine   delight,    nor   put   it    down   without   some 
re-awakened    hope    for    human    destiny.     One    great 
advantage  at  least  it  can  claim  over  its  predecessors,  in 
that  it  was  written  after  the  Industrial  Revolution  had 
matured,  and  when  our  experience  of  the  new  uses  of 
machinery  had  already  taught  us  something  both  of 
their  blessing  and  of  their  curse.    On  Morris'  own  mind, 
it  is  true,  it  was  the  evil  side  of  this  development  which 
made   the   more   lasting   impression.     He   depreciates 
almost  wilfully   the   value   of   mechanical   invention ; 
he  would  fain  break  down  the  factory  and  the  engine 
to   set   up   the   joiner's   bench   and   the   blacksmith's 
anvil,  so  dogmatically  does  he  deny  the  right  of  dynamo 
and  power-wheel  to  replace  the  craft  of  hand  or  skill  of 
eye.     Yet,   by    whatever     narrowness    of    vision    the 
mediaeval  sympathies  of  Morris  have  availed  to  warp 
the  details  of  the  picture,  none  the  less  its  main  per- 
spective is  accurate  and  broad  ;   its  atmosphere  shines 
true.     His  ideal  country  is  a  very  human  place,  his 
men  and  women  find  happiness  in  just  those  things 
wherein  men  and  women  have  always  found  them.     His 
at  least  is  a  society  which  we  might  love  and  welcome  ; 
and  whereas  Plato's  Republic  is  too  stern  and  grim 
for  most  of  us,   More's  at   once  too  naive    and    too 
sophisticated,  I  doubt  if  the  man  exists  who  would  not 
most  gladly  and  thankfully  awaken,  as  Morris'    hero 
woke,  to  find  himself  a  temporary  inhabitant  of  the 
delectable  country  of  Nowhere. 


UTOPIA  6i 

It  was  (or  so  it  seemed)  a  beautiful  bright  morning  of 
June,  when  he  left  his  suburban  residence  very  early 
before   breakfast   to   take   a   stroll   by   the   river-side. 
He  was  a  Londoner  of  Radical  instincts  and  member  of 
a  club  of  red-hot  Socialists,  whose  tongues  had  wagged 
freely    overnight    concerning    the     great     revolution 
which   was   one    day   to   come    over   the   world.     His 
thoughts,  as  they  ran  back  over  the  academic  argu- 
ments of  the  debate,  were  suddenly  distracted  by  the 
changed  aspect  of  the  scene  before  him.     He  stood  by 
the    Thames,    yet    somehow   not   the     Thames.     The 
ferry-man  whom  he  engaged  to  row  him  out,  was  dressed 
in  a  flowing  blue  tunic  and  talked  like    a    well-bred 
courtier.     As  he  rowed  the  boat  down-stream  past  a 
sleepy,  smokeless    Hammersmith,    discoursing   strange 
things,  as  he  rowed,  concerning  the  salmon  fisheries  of 
Putney,  they  came  presently  upon  a  bridge  so  grand 
and  fanciful  that  it  outvied  the  Ponte  Vecchio   itself 
for  strength  and  beauty.     By  this  bridge  the  ferry-man 
moored  his  boat  and  brushing  all  offer  of  pay  aside, 
conducted  his  astonished  fare  to  a  restaurant  or  "  Guest 
House."     This  Guest  House  was  a  frescoed  hall  with 
Gothic  windows,  marbled  floor  and  open  timber  roof. 
As  the  pair  entered,  the  waiting  girls  left  scattering 
their  balms  and  lavender  upon  the  floor,  and,  taking 
each  guest  by  the  hand,  led  them  to  a  table  whereon 
were  set  ripe  strawberries  and  roses  freshly  gathered 
from  the  garden  plot   outside.       There  sat   down  to 
table  with  them  a  Y  orkshireman,  a  weaver  by  trade, 
who  (as  his  friend  the  ferry-man  explained)  had  over- 
done   himself    between    working  at  his  loom  and  his 
mathematics,  and  had  come  to  stay  in  London,  of  all 
places   in   the   world,   for   an   out-door   holiday.     The 
Guest  (for  so  the  two  friends  agreed  to  call  our  stranger) 
was  consumed  with  curiosity  to  know  what    all    this 
might   mean,   but   when   he   read   upon   the   wall    an 
inscription  dated  1962,  heard  his  companions  talk  of 


62  NEW  FALLACIES  OF  MIDAS 

Epping  Forest  cleared  of  houses,  and  finally  was 
introduced  to  a  dustman  who  wore  a  surcoat  of 
embroidered  gold,  and  whose  leisure  hours  were  spent 
in  writing  "  reactionary  novels,"  he  left  his  doubts  and 
his  questions  unspoken,  and  abandoned  himself  as  to  a 
preposterous  dream. 

The  ferry-man,   whose  calling  seemed  to  make  no 
special  claim  upon  his  time,  nov/  proposed  to  take  the 
guest  out  for  a  drive  and  to  show  him  the  sights  of 
London.     So  the  Golden  Dustman  was  dispatched  to 
borrow  them  a  horse  and  cart,   and  off  they    went. 
The  sights  of  London  were  the  most  miraculous  of  all. 
What  strange  sights  the  Guest  saw  there   and  what 
stranger  facts  were  then  disclosed  to  him,  how  he  met 
an   aged  antiquarian  and  heard  from  his  lips  the  true 
history  of  the  great  change,  how  he    learnt,    that  all 
central  governments  were  abolished  and  Parish  'Parlia- 
ments   reigned    supreme,    how    he    found    the    great 
metropolis  as  modest,  cleanly  and  demure  as  a  little 
market-town,    Kensington    a   landscape    dotted    with 
green  trees,   and  Piccadilly  a  "  short  street  of  hand- 
somely built  houses,"   how  Trafalgar  Square  was  an 
orchard  full  of  apricots,  and  the  House  of  Commons  a 
storage  for  manure  ; — all  this  is  a  long  tale  which  would 
but  spoil  in  the  telling.     But,  in  brief,  it  was  a  changed 
London  and  a  different  world,  different  in  the  simplicity 
of    the    people's    taste,    the    sober  neatness    of    their 
dwellings,  the  beauty  and  aptness  of  their  dress  ;  differ- 
ent too  in  the  tranquil  course  of  their  work  and  leisure, 
free  alike  from  anxious  hurry  as  from    vulgar    dissi- 
pation ;    but  different  above  all  in  their  frank  good- 
natured  happiness  and  their  unfailing  zest  to  be  always 
doing  a  neighbour  some  good  turn. 

In  their  work  (and  they  are  indefatigable  workers) 
the  first  and  guiding  principle  is  to  study  the  needs  of 
others,  the  second  to  choose  that  task  which  best  is 
suited  to  the  aptitude  and  taste  of  each  ;  the  third,  to 


UTOPIA  63 

do  whatever  their  hands  contrived,  with  all  their  might 
and  in  scorn  of  slovenly  or  hurried  w^orkmanship. 

Manufacture  is  now  w'holesome  where  it  had  been 
foul  and  sordid,  agreeable  where  it  had  been  distasteful, 
a  quickening  joy  where  it  had  been  a  deadening 
drudgery.  In  short,  it  is  become  once  more,  as  by  its 
very  name  it  should  be,  a  craft  of  hand  ;  and  by  one 
expedient  or  another,  the  various  evils  of  Industrialism 
as  we  know  it,  have  in  Morris'  Utopia  been  done  away. 

We  may  note,  firstly,  that  wherever  hand-made 
products  are  superior  to  machine-made,  the  latter  have 
been  discarded  altogether.  Thus  thousands  whose 
life  w^as  formerly  one  long  maze  of  whirring  wheels,  and 
the  dull  recurrence  of  a  soulless  task,  now  in  the  happy 
land  of  Nowhere,  taste  the  joys  of  individual  craft- 
manship,  and  each  learns  to  set  upon  his  w^ork  the 
impress  of  his  self.  Some  drive  their  independent 
trades  ;  others  unite  in  Banded  Work-shops  to  carry 
on  the  more  complex  processes.  Each  to  his  choice  ; 
and  even  the  heat  of  kilns  and  furnaces  will  not  deter 
some  enthusiasts  from  glazing  pottery  or  blowing 
glass. 

Secondly,  though  handiwork  has  in  the  main  sup- 
planted machinery,  yet  "  all  work  irksome  to  do  by 
hand,  is  done  by  immensely  improved  machinery." 

Thirdly,  "  When  any  piece  of  work  is  found  too 
disagreeable  or  troublesome,  it  is  given  up  and  folk 
do  altogether  without  the  thing  produced  by  it." 

Fourthly,  toilsome  but  necessary  tasks  such  as  the 
making  of  roads  or  the  digging  of  mines,  are  undertaken 
by  the  young  and  stahvart,  in  a  spirit  of  cheerful 
service  ;  and  as  the  ferry-man  remarked,  it  is  "  good 
sport  trying  how  much  pick-work  one  can  get  into  an 
hour,"  and  a  good  training  for  the  muscles  to  boot. 

Fifthly,  and  perhaps  most  noteworthy,  of  all,  there 
is  variety  of  work  for  every  one.  For,  just  as  each  has 
the  free  choice  of  his  trade  or  profession,  so  each  equally 


64  NEW  FALLACIES  OF  MIDAS 

enjoys  the  free  disposition  of  his  time.  Thus  every 
man  can  indulge  his  peculiar  hobby  ;  a  weaver  may 
spend  his  spare  hours  on  geometry,  a  dustman  in 
writing  romances.  If  a  helping  hand  is  needed  in 
some  other  quarter  the  daily  task  may  be  allowed  to 
slide,  and  Morris'  last  chapters  tell  of  a  merry  company 
of  miscellaneous  folk,  gathered  in  the  hay-fields  of  the 
Upper  Thames.  The  ferry-man  is  there  and  has  left 
his  boat  ;  the  girls  are  there  and  have  laid  aside 
their  household  duties ;  even  men  of  science, 
students  and  historians  abandon  their  sedentary  lives, 
and  though  some  are  poor  hands  at  the  start,  all  join 
in  the  game.  Only  certain  churlish  house-builders 
refuse  their  help — because  forsooth  they  have  found  a 
job  which  "  interests  them,"  and  they  prefer  to  get  on 
with  their  work. 

(ii.) 

Morris  was  no  trained  economist.  Romance  was 
more  to  him  than  science.  His  whole-hearted  faith  in 
human  nature,  his  clear  vision  of  what  man  might  be 
at  his  best,  rendered  him  impatient  of  material 
obstacles.  For  him  to  conceive  of  a  Utopia  was  to 
believe  in  its  possibility,  and  for  such  a  nature  nothing 
that  was  right  was  impracticable.  Nevertheless,  along 
with  much  that  is  pure  fancy,  there  is  also  contained 
in  his  picture  much  that  is  sound  sense  ;  and  it  is  well 
worth  while  to  sift  and  disengage  the  two  ;  For  every 
reader,  I  suppose,  the  first  impulse  is  to  doubt  whether 
any  country  which  did  its  business  upon  such  hap- 
hazard and  ill-regulated  methods  as  Morris'  imaginary 
state,  could  possibly  survive  for  a  week.  We  are 
accustomed  to  believe  that  such  prosperity  as  we  enjoy 
is  due  in  no  small  measure  to  the  nice  adjustment  and 
close  co-ordination  of  our  industrial  machine.  Organ- 
isation is  the  catch  word  of  the  day,   and  we  have 


'    UTOPIA  65 

admired  and  feared  by  turns  that  nation  which  has 
brought  such  mechanical  efficiency  to  its  highest  pitch. 
Y  et  the  worth  of  a  system  is  to  be  known  by  its  fruits, 
and  we  have  seen  what  a  harvest  the  Germans  at  least 
have  reaped  of  theirs.  To  transform  a  people  into 
a  vast  machine,  to  treat  men  and  women  as  mere 
cogs  upon  a  wheel,  that  is  not  the  road  to  happiness, 
nor  even  in  the  long  run  perhaps  to  success.  Elaborate 
as  may  be  details  of  such  a  system  and  perfect  as  may 
be  its  method  of  getting  the  best  work  from  each 
individual  man  or  woman,  yet  so  long  as  the  system  is 
imposed  upon  them  from  above,  it  must  fall  far  short 
of  man's  ideal  destiny.  "  A  place  for  everyone  and  every- 
one in  his  place  "  is  a  well  sounding  motto  ;  but  to  find 
a  man's  true  place  in  the  world  is  not  for  officials  and 
super-men  but  for  each  man  himself  ;  he  can  find  it 
if  he  cares  to,  and  nobody  else  can  find  it  for  him. 

Organisation  however  is  not  perhaps  the  peculiar 
vice  of  our  English  industrial  system  ;  it  is  certainly 
not  too  much  of  a  machine,  but  I  am  not  sure  that  it 
is  not  something  almost  as  bad.  Its  development  has 
not  been  made  under  the  guidance  of  officialdom,  it 
has  sprung  up  at  haphazard  like  the  growth  of  a 
primaeval  forest,  and  its  loose  entangling  network  clogs 
and  hampers  the  tender  plant  of  industrial  liberty. 
We  boast  that  Englishmen  are  free  because  of  the 
absence  of  compulsion  ;  but  the  truth  is  that  though 
they  are  not  slaves  of  a  system  they  are  none  the  less 
the  slaves  of  circumstances  and  chance  ;  and  in  that 
there  is  small  ground  for  pride.  Millions,  as  things 
are,  have  no  real  freedom  in  their  choice  of  a  profession. 
Our  workshops  are  full  of  square  pegs  in  round  holes, 
and  round  pegs  in  square  holes.  A  child  born  in  the 
potteries  is  marked  down  from  birth  to  follow  in  the 
family  tradition.  May  be  that  his  whole  interest  lies  in 
plants  and  horticulture,  and  that  he  would  make  an 
admirable     gardener ;     but    in    the   workshops    he   is 


66  NEW  FALLACIES  OF  MIDAS 

secure  of  a  living  and  to  strike  out  a  line  of  his  own 
would  be  too  hazardous  an  adventure.  So  lads  are 
taken  from  school  at  fourteen  and  saddled  for  life  with 
occupations  for  which  they  have  neither  aptitude  nor 
taste.  Once  settled  in  a  job,  he  will  be  a  bold  man  that 
will  leave  it.  If  he  cuts  adrift  from  the  one  business 
which  he  understands,  he  has  not  the  means  or  oppor- 
tunity to  learn  another  ;  and  a  meagre  livelihood  by 
unskilled  or  casual  labour  is  the  sole  alternative  to 
unemployment.  As  compared  with  him  the  labour  of 
Morris's  Utopia  is  as  a  freeman  to  a  slave.  He  is  free 
to  choose  his  occupation,  to  take  a  job  or  leave  it,  to 
work  long  hours  or  short  ;  and  in  such  liberty  he  finds 
not  an  excuse  for  idle  sloth  but  a  spur  to  more  willing 
energy.  He  may  be  poorer  and  he  may  be  less  efficient, 
but  there  can  be  little  doubt  that  he  would  be  the 
happier  man  of  the  two.  For  only  that  man  is  truly 
happy  v/ho  has  realised  himself  to  the  full  in  his  life's 
work  ;  and  if  we  do  indeed  believe  that  each  individual 
human  being  has  a  worthy  place  to  fill  in  the  world  and 
a  self  to  realise  therein  (which  is  only  another  way  of 
saying  that  Providence  understands  its  business),  then 
we  must  allow  him  some  more  real  freedom  of  choice 
to  find  that  place  and  fuller  opportunity  to  use  it. 
In  our  perfect  society  nothing  short  of  complete  eman- 
cipation from  the  tyranny  of  systems  and  from  the 
entanglement  of  chance  must  be  our  ultimate  ideal. 

To  consider  by  what  precise  steps  that  ideal  may  be 
reached  is  not  here  to  our  purpose  ;  but  it  is  perhaps 
necessary  to  repeat  that  legislation  and  officialdom 
alone  will  never  achieve  it.  Indeed  many  of  our 
modern  reformers  seem  to  be  heading  in  the  wrong 
direction  ;  in  their  zeal  for  efficiency  at  any  price,  they 
have  been  too  ready  to  imitate  German  methods. 
They  would  make  it  the  State's  business  to  lead  up  the 
child  in  the  way  he  should  go  ;  they  would  provide 
offices  where  his  capacities   could  be  tabulated   and 


UTOPIA  67 

his  record  pigeon-holed,  and  officials  who  would  find 
him  a  place,  train  him  to  be  fit  for  that  place,  and, 
whether  he  liked  it  or  not,  put  him  into  that  place,  as 
though  he  were  all  the  while  not  a  human  being  with 
tastes  and  feelings  of  his  own,  but  simply  a  pawn  for 
bureaucrats  to  play  with.  But  though  bureaucracy 
is  at  all  costs  to  be  avoided,  modern  society  could 
hardly  exist  without  some  regulation  of  industry. 
There  must  be  opportunities  for  technical  training  and 
specialised  education,  public  channels  of  information, 
and  organised  facilities  for  the  free  movement  and 
distribution  of  labour  ;  without  these  it  would  be  just 
as  impossible  to  find  work  suited  to  every  kind  of  person 
as  to  find  persons  suited  to  every  kind  of  work  of  the 
community.  It  is  not  enough  to  assume  that  different 
persons  will  have  different  gifts  and  different  tastes,  we 
must  also  devise  methods  whereby  to  discover  these 
gifts  in  individuals  and  to  draw  them  out  where  they 
are  latent.  Above  all,  we  shall  need  the  discipline 
of  education  to  cultivate  in  men  a  high  sense  of  duty 
and  public  service  ;  for  it  is  only  in  obedience  to  these 
higher  motives  that  they  would  voluntarily  undertake 
the  more  arduous  and  thankless  forms  of  labour.  Nor 
will  Education  be  needed  only  to  train  men  in  the 
right  choice  and  right  use  of  a  profession.  We  must 
educate  the  public  that  consumes  as  well  as  the  workers 
that  produce  ;  for,  unless  there  is  a  general  demand  for 
work  of  the  right  sort,  it  is  useless  to  expect  that  the 
right  sort  of  work  will  be  done.  Therefore  if  the  pro- 
ducer's interests  are  to  be  safe-guarded,  there  must  be 
a  corresponding  adjustment  of  the  consumer's  tastes. 
Before  we  can  render  the  former's  work  a  more  human- 
ising and  inspiring  business,  the  latter  must  be  prepared 
to  make  some  sacrifice,  and  to  pay  the  cost  of  such  a 
change.  For  cost  there  must  certainly  be — and 
Morris's  shrewd  insight  has  not  missed  it. 

Life  in  the  ideal  society  which  Morris  pictured    is 


68  NEW  FALLACIES  OF  MIDAS 

marked  above  all  by  an  austere  simplicity  of  taste. 
His  imaginary  people  take  no  pride  or  pleasure  in  the 
multitude  of  their  possessions ;  we  find  among 
them  none  of  the  artificial  refinements  and  elaborate 
mechanism  of  luxury  and  comfort,  with  which  writers 
such  as  Mr.  H.  G.  Wells  have  chosen  to  endow 
posterity  ;  indeed  we  shall  find  little  enough  of  the 
cheap  abundance  and  pretentious  splendour  which  is 
the  peculiar  boast  and  passion  of  our  own  age.  In 
Utopia  there  would  be  less  finery,  less  furniture,  less 
paraphernalia  of  comfort  and  convenience. 

But  would  that  after  all  be  any  great  loss,  provided 
that  what  there  was  were  good  ?  More  than  ever  are 
we  now  tempted  to  spend  money  on  that  which  is  not 
bread,  whether  as  food  for  the  body  or  food  for  the 
mind.  Such  a  multitude  of  new  pleasures  and  novel 
playthings  are  now  within  the  grasp  of  all  that  rich 
and  poor  alike  are  beginning  to  lose  their  sense  of  values, 
and  to  abandon  themselves  to  a  materialistic  view  of 
life,  and  to  confound  happiness  with  pleasure.  What 
is  it,  after  all,  that  makes  true  happiness  ?  Is  it  much 
and  cheap,  or  little  and  good  ?  Is  it  the  flaunting 
fashions  of  novelty  and  change,  or  the  same  old 
pleasures  that  men  of  all  times  and  places  have 
enjoyed  ?  Is  it  a  flood  of  cheap  magazines  and  picture 
papers  and  sixpenny  novels  or  the  well  thumbed 
volume  of  Shakespeare,  Tennyson  or  Scott  ?  Is  it  a 
set  of  hand-made  ware,  turned  by  a  craftsman  and 
treasured  through  a  life- time  or  is  it  half-a-dozen  cheap 
tea-services  broken  by  as  many  house-maids  in 
succession  ?  Is  it  a  country  walk  and  a  bed  at  the 
inn,  or  a  whirligig  tour  through  six  counties  and  the 
make-believe  comfort  of  pretentious  hotels  ?  Is  it 
a  dance  on  a  village  green  to  the  tune  of  a  song  or  a 
fiddle,  or  is  it  the  discordant  mimicry  of  the  gramo- 
phone and  the  fevered  sensations  of  a  picture  palace  ? 
The  true  secret  of  combining  poverty  and  happiness 


UTOPIA  69 

it  may  yet    be   ours    to   discover.     Yet  it  is   no   new 

secret.     The  Athenians  were  perhaps  the  first  to  find  it 

out  and  I  am  not  sure  that  it  did  not  die  with  them. 

It    was   Pericles  who  summed  it    up    in     his    single 

phrase,    <^iAoKaAov/x€v  /xer'  evreXetai,    taste    and     economy 

combined   in  one ;    love  of  all  in    the    world    worth 

loving*    and    the    simple    life.       This    is    what    Mr. 

Zimmern  has  to  say  of  that  ideal  in  his  book  "  The  Greek 

Commonwealth."  "  Greek  Literature,  like  the  Gospels, 

is  a  protest  against  the  modern  view  that  the  really 

important  thing  is  to  be  comfortable.     The  comfort 

promised  by  the  Gospels   (and  that  enjoyed  by  the 

Greeks  whether  the  same  or  somewhat  different),  and 

the   comfort     assured    by     modern    inventions     and 

appliances  are  as  different  as  ideals  can  be.     We  must 

imagine  (he  continues,  speaking  of  the  civilisation  of 

the    ancient    Greeks)    houses    without    drains,    beds 

without  sheets  or  springs,  rooms  as  cold  or  as  hot  as  the 

open  air,  only  draughtier,  meals  that  began  and  ended 

with   pudding,    and   cities    that    could   boast   neither 

gentry  nor  millionaires.     We  must  learn  to  tell  the 

time   without    watches,    to   cross    the   rivers    without 

bridges  and  seas  without  compass — to  study  poetry 

without  books,  geography  without  maps,  and  politics 

without  newspapers.     In  a  word  (if  we  are  to  realise  the 

Greeks)   we  must  learn  how  to  be    civilised    without 

being  comfortable.     We  must  go  behind  the  Industrial 

Revolution.     The  older  Greeks  did  not  want   to  be 

rich  for  the  sake  of  riches.     They  only  desired  riches 

when  they  had  convinced  themselves  that  riches  were 

necessary  to  social  well  being.     They  knew,  as  some 

Eastern  people  know  still,  that  "  a  pennyworth  of  ease 

is  worth  a  penny,"   and  that  it  is  not  worth    while 

spending  two  pennyworth  or  more  of  worry  and  effort 

to  attain  it.       That  is   precisely  the  spirit    of    Morris' 

*  The  Greek  word  Ka\6s  implies   so  much   besides  .-esthetic   beauty 
that  it  is  impossible  to  find  one  English  word  whereby  to  render  it. 


70  NEW  FALLACIES  OF  MIDAS 

Utopia,  and  what  its  lesson  may  be  for  the  world  of 
to-day  is  well  worth  consideration.  Perhaps  neither 
Morris  nor  the  Greeks  were  very  far  from  the  truth. 

First  of  all  then,  in  our  pursuit  of  social  happiness, 
we  shall  consider,  not  whether  a  thing  is  desirable  to 
consume,  but  whether  it  is  desirable  to  produce,  and 
when  Morris  said  that  there  are  some  pieces  of  work 
too  disagreeable  or  too  troublesome  to  be  worth  while 
performing,  we  shall  agree  with  him.  No  man  has  the 
right  to  endanger  the  lives  or  health  or  happiness  of  the 
workers  for  his  own  selfish  ends  ;  and  the  sooner  we 
cease  to  do  so  the  better  for  their  welfare  and  for  our 
own  peace  of  mind.  In  this  matter  indeed  the  con- 
sciences of  men  have  been  a  little  stirred  already.  We 
do  not  now  send  women  down  coal-pits,  or  employ 
children  of  tender  age  in  factories.  Laws  have  been 
passed  restricting  or  forbidding  some  dangerous  pro- 
cesses, and  insisting  on  healthier  conditions  for  others. 
Because  pottery-making  of  the  normal  type  is  injurious 
to  the  workers,  the  public  is  encouraged  in  the  use  of 
pottery  with  a  leadless  glaze.  But,  as  a  rule,  we 
enquire  too  little  into  the  circumstances  of  manufacture, 
and  do  not  care  to  be  told  that  our  pet  luxury  is  pro- 
duced at  the  cost  of  the  happiness  of  somebody  else. 

Furthermore,  we  shall  consider  not  only  what 
character  of  work  is  most  injurious  but  what  work 
is  most  beneficial  to  perform  ;  and  here  too  Morris, 
I  think,  struck  the  right  note,  in  insisting  on  the 
superiority  of  work  done  by  hand  over  work  done  by 
machine.  If  such  work  is  more  costly  to  produce,  its 
greater  permanence  and  artistic  value  is  more  than 
sufficient  compensation  ;  and  while  the  worker  gains 
in  the  truer  pleasure  and  interest  of  producing  it,  the 
consumer  also  gains  a  truer  satisfaction  from  the 
product  of  the  other's  enthusiasm.  None  the  less  it  is 
more  than  a  little  doubtful  whether  we  can  afford  to 
dispense  altogether  with  machinery,  unless  indeed  we 


UTOPIA  71 

are  prepared  to  put  back  the  clock  a  hundred  years  and 
to   forgo    three    quarters   of   our   present   prosperity. 
Arts  and  crafts  may  already  be  receiving  more  recog- 
nition  and   encouragement,    and   agriculture   may   be 
restored  to  its  rightful  place  in  our  national  life  ;    but 
for  the  most  part  Morris's  ideal  must  be  acknowledged 
to  be  impracticable.     Machinery  has  come  to  stay  ; 
and  our  business  is  not  to  put  the  clock  back  but  to  put 
it  forward,  not  to  abolish  machinery  but  so  to   develop 
and  perfect  its  uses  that  the  grinding  monotony  and 
discomfort  of  the  machine  minder's  work  may  be  as  far 
as  possible  relieved  and  lightened.     Mechanical  science 
is  already  making  great  strides  in  this  direction.     Until 
recent  years  for  instance,  the  cotton  spinning  machine 
was  so  arranged  that  if  a  single  thread  snapped,  the 
spinner  was  forced  to  stop  the  machine  by  hand  and  at 
infinite  pains  uncoil  the  threads   in    order  to  recover 
the  broken  end.     Now  the  machine  is  automatically 
stopped  directly  the  break  occurs  ;  and  the  saving  of 
time  and  trouble  to  the  spinner  may  well  be  imagined. 
And  other  inventions  and  improvements  of  the  sort 
will  do  much  to  ease  the  workers'  burden,   and  after 
all,    monotony   is   not   confined   to     the     process     of 
machinery  ;    there  is  Hood's  poem  to  remind  us  that 
purely  manual  labour  can  also  be  monotonous,   and 
that  there  is  no  slavery  like  the  slavery  of  the  seam- 
stress.    A   machine   minder   whose   business   calls   for 
some   technical   knowledge   and   a   skilful   hand   with 
screw-driver  and  bolt,  may  well  take  a  real  pride  and 
pleasure  in  the  manipulation  of  his  engine.     The  chief 
source  of  weariness  arises  from  the  absence  of  variety 
and  change,  and  for  this  the  remedy  is  not  far  to  seek. 
In  some  countries  it  has  been  already  applied,  and 
instead  of  keeping  one  man  or  woman  to  the  continuous 
performance  of  a  single  process,  employers  allow  them 
to  go  the  round  of  the  shops,  thus  keeping  alive  an 
interest  in  their  work  and  increasing  their  efficiency  to 


72  NEW  FALLACIES  OF  MIDAS 

boot.  Yet  there  must  remain  some  kinds  of 
labour  whether  done  by  machinery  or  hand  which  are 
too  wearisome  and  soulless  for  a  life  time's  work,  and 
wherever  improved  machinery  cannot  provide  a 
solution  of  this  problem,  it  is  not  impossible  that 
Morris's  suggestion  might  hold.  The  young  and 
stalwart  might  be  drafted  into  such  labour  for  a  year 
or  so  at  a  time  ;  and  the  time  thus  spent  on  the  roads 
or  in  the  mines  would  be  no  bad  discipline  and  training. 
Ruskin  once  led  out  a  band  of  undergraduates  to  make 
a  road  near  Hinksey,  and  a  very  bad  road  they  made 
which  remains  there  to  this  day.  But  they  enjoyed  the 
experience  ;  and  such  labour  would  perhaps  be  no 
more  irksome  than  the  military  training  which  most 
countries  now  enforce. 

Last  and  not  least,  work  which  takes  too  much  of  a 
man's  time  is  almost  as  seriously  to  be  condemned  as 
work  which  is  downright  unhealthy,  unwholesome 
and  monotonous.  To  spend,  as  many  labourers  do 
to-day,  twelve  or  more  hours  out  of  the  twenty-four 
on  work  which  simply  exhausts  the  body  and  does  not 
exercise  the  brain,  is  not  the  purpose  for  which  iran 
was  made.  The  people  of  Nowhere,  we  may  note,  were 
a  leisured  people.  They  could  find  time  (as  perhaps 
men  should),  to  leave  their  bench  for  a  gossip  or  to 
drive  a  neighbour  into  town.  But,  what  is  more,  they 
knew  how  to  use  their  leisure  well ;  and  this  is  a  side 
of  life  which  we  to-day  neglect  too  much.  It  is  no  use 
pleading  for  an  eight-hour  or  six-hour  day  for  all 
(and  with  the  rapid  improvement  of  machinery  this  is 
not  beyond  the  realm  of  reasonable  prophecy)  unless 
the  time  so  saved  is  well  used  and  not  wasted.  Here 
again  the  true  solution  lies  in  a  wider  and  deeper 
development  of  Education,  not  Education  of  the  schools 
only,  but  such  as  will  not  cease  at  fourteen  nor  at 
eighteen  nor  even  at  twenty-three.  Such  modern 
movements  as  the  Workers'  Educational  Association 


UTOPIA  73 

have  shown  already  what  can  be  done  among  the  adult 
workers,  and  have  discovered  among  the  unlearned 
artisans  an  intellectual  energy  which  puts  the  cultured 
class  to  shame.*  We  may,  as  yet,  have  no  dustmen  who 
write  novels  ;  but  tramps  and  sailors  do  ;  and  the  days 
may  yet  be  coming  when  rustic  Shakespeares  will 
write  tragedies  and  act  them  on  village  greens,  when 
coal-heavers  and  chimney-sweeps,  their  day's  work 
ended,  will  sit  down  to  study  algebra  or  natural 
history,  or  to  carve  themselves  a  sideboard  or  a  mantel- 
shelf, when  in  short,  a  man's  true  life  will  centre  in  his 
voluntary  and  not  in  his  necessary  labour,  in  what  he 
does  for  the  love  of  it,  and  not  in  what  he  does  to  earn 
his  daily  bread. 

Yet  it  must  not  be  lightly  assumed  that  the  ideal 
which  is  here  foreshadowed  would  impose  less  tax 
upon  man's  energies  as  a  whole,  or  that  simple  tastes 
are  altogether  easy  tastes  to  satisfy.  The  unpre- 
tentious beauty  of  plain  dresses  or  simple  furniture 
is  often  the  most  expensive  to  procure  ;  it  costs  a  far 
greater  effort  to  paint  by  hand  a  single  masterpiece 
than  to  turn  out  half  a  million  of  cheap  prints,  or  again, 
it  is  easier  to  erect  a  row  of  mansions  upon  a  uniform 
and  settled  type,  than  to  build  a  cottage  which  will 
combine  the  highest  ideals  of  utility  and  beauty.  So, 
before  the  simple  life  can  also  be  the  happy  life,  we  must 
plan  its  smallest  details  with  elaborate  care,  eliminating 
needless  labour  by  all  manner  of  devices,  and  adapting 
every  article  of  use  to  the  most  efficient  performance  of 
its  function.  And,  whatever  its  difficulties,  the  task 
will  be  worth  while  ;  for  the  consumer  no  less  than  the 
producer  it  is  from  the  simple  rather  than  the  complex 
that  the  highest  satisfaction  is  to  be  gained.     In  life, 

*  The  W.E.A.  is  an  organisation  of  200  branches,  which  provides  of 
weekly  lectures  and  debates  for  11,000  working  men  and  women. 
It  is  undoubtedly  one  of  the  most  striking  educational  experiments  of 
history. 


74  NEW  FALLACIES  OF  MIDAS 

as  in  art,  elaboration  is  only  a  step  towards  a  new  and 
grander  simplicity  of  design  ;  for  complexity  of  itself 
cannot  bring  satisfaction  ;  harmony  and  harmony  alone 
can  bring  us  that.  Now  modern  life  is  not  harmonious  ; 
in  innumerable  ways  its  various  sides  conflict  with  one 
another.  The  town-dweller  who  has  a  taste  for  natural 
beauty,  must  make  a  tedious  journey  in  an  unsightly 
train  before  he  can  gratify  his  taste  ;  does  he  crave 
mental  relaxation,  he  must  take  his  place  among  a 
crowd  of  strangers  in  the  restless  glare  and  tainted 
atmosphere  of  a  concert-hall  or  theatre  ;  or  is  it  merely 
a  matter  of  reaching  his  home  at  night,  he  must  travel 
in  a  subterranean  railway  and  be  hoisted  up  to  the 
fifth  storey  fiat  in  a  jerking  lift.  In  other  words  the 
means  of  satisfaction  are  very  ill-adapted  to  the  end. 
But  in  Utopia  all  this  would  have  been  changed  ;  its 
citizen  will  find  natural  beauty  in  the  garden  lying  at 
his  own  front  door  ;  music  and  other  arts  he  will  enjoy 
in  the  company  of  friends,  relying  (for  in  Utopia  artists 
will  be  numerous)  upon  the  resources  of  his  own  or 
others'  skill.  When  his  work  is  over,  he  will  still  have 
the  zest  and  vigour  to  return  on  foot  to  a  house  of 
moderate  size  which  at  least  he  can  call  his  own.  In 
the  quest  for  happiness  this  present  age  employs  a 
thousand  make-shifts*  that  satisfy  no  one,  and  explores 

*  In  many  respects,  however,  we  are  heading  in  the  right  direction, 
for  we  are  all  the  while  getting  more  simplification  along  with  greater 
complexity.  Let  me  take  an  instance.  The  roll-top  desk  at  which 
I  write  is  far  more  simple  whether  to  make  or  to  use  than  the  bureau 
in  the  next  room.  In  the  bureau  the  drawers  work  stiffly  :  and  seeing 
that  they  are  of  all  shapes  and  sizes,  the  maker  must  have  constructed 
each  at  haphazard  as  he  went  along.  The  drawers  of  the  deslTon  the 
contrary  are  all  made  upon  a  fixed  standard  of  measurement,  and  they 
perform  their  function  to  perfection.  The  result  is  an  economy  of 
labour  both  for  the  craftsman  and  for  the  writer.  But  the  roll-top  desk 
is  out  of  harmony  with  the  other  furniture  being  ponderous  and 
unsightly.  The  labour  saved  by  superior  methods  of  construction 
might  therefore  have  been  expended  to  advantage,  if  more  trouble 
and  thought  had  been  given  to  the  proportions  and  appearance  of  the 
desk.  In  Utopia  bureaux  will  be  as  serviceable  as  roll-top  desks,  and 
roll-top  desks  as  beautiful  as  bureaux. 


UTOPIA  75 

a  thousand  tracks  which  lead  it  nowhere.  But  when 
men  come  to  understand  both  what  their  true  needs  are, 
and  by  what  means  those  needs  can  best  be  satisfied, 
then  it  will  be  strange  indeed,  if  the  complex  civilisa- 
tion in  which  we  live  has  not  been  superseded  by  a 
simpler  and  more  harmonious  way  of  life,  in  which  the 
needs  that  men  feel  are  fewer, the  means  to  their  satisfac- 
tion more  direct  and  so  the  resulting  happiness  more 
lasting  and  complete. 

(iii.) 

To  ourselves,  living  as  we  do  in  the  midst  of  so  much 
strife  and  self-seeking  and  distress,  William  Morris' 
ideal  may  well  seem  too  daring  in  its  aspirations,  and  too 
visionary  in  its  almost  childlike  faith  in  human  virtue 
and  human  happiness  ;  yet  no  ideal  would  be  worth 
having  that  was  otherwise.  If  we  set  our  compass 
for  the  Happy  Isles,  it  is  not  with  the  expectation  of 
arriving  there  to-day,  nor  yet  to-morrow.  It  is 
enough  to  know  that  there  lies  our  goal,  and  to  be 
assured  that  at  least  we  are  not  steering  direct  for  their 
antipodes.  If  such  a  society  as  Morris  pictured  could 
ever  be  realised  on  this  earth,  it  certainly  will  not  be 
reached  at  a  single  bound  ;  and  granted  that  we  step 
by  step  are  moving  in  the  right  direction  (and  in  many 
ways  we  have  some  reason  to  suppose  that  we  are), 
that  is  at  once  both  a  ground  for  optimism  and  a  proof 
of  Morris's  farsightedness.  There  is,  however,  one  side 
to  his  system  to  which  I  have  hitherto  made  no  allusion. 
Among  the  people  of  his  ideal  there  was  no  money,  no 
private  property,  no  trafficking  for  gain  ;  they  were 
Communists  out  and  out.  When,  for  example,  the 
Guest  asked  a  shop-girl  for  tobacco,  she  pressed  upon 
him  a  pouch  and  a  pipe  as  well  ;  yet  would  not  take  a 
penny  in  return.  In  short,  the  citizens  of  Nowhere 
laboured  their  hardest  and  gave   their  best,   careless 


76  NEW  FALLACIES  OF  MIDAS 

whether  they  should  receive  as  much  again.  Here 
indeed  is  a  way  of  life  so  utterly  strange  and  foreign 
to  our  own  habits,  that  we  feel  as  though  the  ground 
on  which  common  mortals  tread  had  been  swept  away 
from  beneath  our  feet.  Of  Morris's  other  notions  we 
found  some  at  least  to  be  not  utterly  impracticable  and 
some  to  be  partially  realised  already.  But  this  is  a 
transformation  of  human  character,  of  which  in  Morris's 
day  at  any  rate  the  world  contained  no  promise, 
hardly  even  the  shadow  of  a  hint.  There  was  never 
a  time  when  business  was  more  keen  or  competition 
fiercer.  Even  to-day,  though  ideals  are  swiftly 
changing,  money  is  still  the  standard  of  success,  and  the 
passport  to  social  or  political  advancement.  Private 
property  and  the  principles  of  credit  and  exchange  are 
still  the  very  corner-stones  of  our  social  and  economic 
edifice. 

Hitherto  throughout  the  preceding  chapters  of  this 
book,  we  have  considered  the  world,  not  as  a  compound 
of  warring  and  jealous  elements,  but  as  though  it  were 
one  great  family,  confronted  with  the  single  problem  of 
supporting  life,  and  meeting  it  with  a  united  effort 
and  a  common  will.  But,  look  at  the  world  how  you 
will,  this  is  not  the  actual  condition  of  affairs.  You 
will  not  find  unity  and  mutual  service,  but  division  and 
self-interest ;  not  generous  emulation,  but  bitter 
rivalry ;  not  co-operation  but  suicidal  competition. 
Commerce  is  a  battle  in  which  tradesman  is  matched 
against  tradesman,  merchant  against  merchant  ;  and 
every  man's  hand  is  against  his  neighbour,  nor  does 
the  antagonism  stop  with  individuals  ;  whole  classes 
are  now  set  at  variance,  and  are  busy  marshalling  their 
legions  for  the  fight.  Artisans  have  combined  to 
challenge  the  power  and  authority  of  the  capitalist, 
and  the  capitalist  on  his  part  is  not  minded  to  yield 
without  a  struggle.  Nations  too  are  entering  the  lists  ; 
and  economic  warfare  is  invoked  to  finish  the  work 


UTOPIA  77 

begun  by  battle-ships  and  cannon.  The  principle  of 
Free  Trade  at  least  put  the  produce  of  each  nation  at 
the  service  of  them  all,  thus  leaving  every  country  to 
make  that  contribution  to  the  common  stock  which  the 
abilities  of  its  people  or  the  resources  of  its  land  best 
fitted  it  to  make.  But  the  nations  would  not  have  it 
so  ;  and  must  needs  set  up  protective  tariffs,  and  each 
seek  prosperity  behind  the  artificial  stronghold  of  its 
own  ring-fence. 

Now  in  Morris's  tale  there  were  neither  national 
frontiers  nor  national  causes  and  much  less  national 
feuds.  Each  country  lived  with  its  neighbour  as 
peacefully  as  England  lives  with  Wales,  and  there  were 
indeed  no  national  governments  to  pick  a  quarrel,  nor 
national  causes  for  quarrel.  And  when  this  is  said,  it 
is  plain  that  we  must  here  part  company  with  this 
romantic  dreamer,  for  events  have  happened  since  his 
day  which  he  would  have  deemed  incredible,  and 
between  our  world  and  his  Utopia  there  is  fixed  a  gulf 
wider  than  theories  or  prophecies  can  bridge. 


PART  II. 

Chapter  VIII. 

VALUE. 

It  is  the  business  of  all  good  prophets  to  dream  dreams  ; 
and  pleasant  rosy-coloured  dreams  let  them  by  all 
means  be,  if  they  can  give  us  better  hopes  for  our  own 
happiness  or  a  better  confidence  for  the  future  of  the 
world.  The  economist's  business  is  more  prosaic.  He 
must  face  the  facts,  whether  pleasant  or  unpleasant,  and 
take  the  world  as  he  finds  it.  Men  are  not  all  saints  or 
archangels  as  yet,  and  that  they  will  ever  be  so  appears 
in  the  last  degree  unlikely.  In  the  meantime,  to  us  of 
the  twentieth  century,  the  moneyless  country  of 
Morris's  imagination  seems  as  fantastic  as  a  scene  out  of 
fairyland.  We  should  be  as  little  surprised  to  meet  a 
giant  marching  down  Watling  Street  in  seven-league 
boots  as  to  find  a  tobacconist  who  would  lavish  pipes 
upon  us  gratis.  Such  disinterested  generosity  is  not 
the  way  of  the  world  as  we  know  it ;  and  just  as  men 
and  women  bought  and  sold  in  Noah's  day,  so  they 
have  been  buying  and  selling  ever  since.  Only  once 
and  again  throughout  the  course  of  history  have  there 
been  brief  departures  from  this  universal  code  of 
commerce.  The  early  Christians,  to  name  one  of 
them,  "  had  all  things  in  common  "  (though  even  they 
sold  their  goods  without  compunction  to  those  who 
were  not  of  the  faith).  Once  too,  on  the  inhospitable 
coasts  of  New  England,  our  Puritan  settlers  made  a 
similar  experiment.  It  ended  in  utter  failure,  and  not 
until  this  quixotic  policy  had  been  abandoned,  did  the 

7* 


8o  NEW  FALLACIES  OF  MIDAS 

colony  begin  to  thrive.  Other  attempts,  whether  due 
to  religious  zeal  or  philanthropic  enthusiasm  have  had 
no  better  success  ;  they  have  lingered  for  a  time  and 
passing  have  left  no  mark  upon  the  world.  After  two 
thousand  years  of  Christianity,  the  society  for  which 
Morris  wrote  was  more  and  not  less  the  slave  of 
money,  than  were  the  societies  that  had  gone  before. 
Men  were  governed,  not  by  the  precepts  of  the  Sermon 
on  the  Mount,  but  by  the  rules  of  high  finance.  Their 
gods  were  not  the  kindly  spirits  of  benevolence  and 
mutual  service  ;  they  were  the  grim  deities  of  com- 
petition and  distrust  ;  their  temple  built  upon  a 
foundation  of  hard  cash  ;  the  victims  sacrificed  at 
their  altar  dupes,  bankrupts  and  ruined  creditors ; 
and  written  large  across  its  stones  the  uncompromising 
legend,  "  Nothing  for  nothing  here,  and  precious  little 
for  sixpence." 

And  as  yet,  all  this  is  not  greatly  changed ;  so  that, 
for  the  present,  it  would  appear,  and  on  into  the 
future  as  far  as  most  of  us  can  see,  we  must  accept  this 
as  the  rule  of  human  action,  that  men  will  give  only 
upon  the  condition  that  they  shall  receive  at  least  as 
much  again.  Whether  it  be  goods  or  money  or  services 
that  we  offer  to  our  neighbour,  we  are  never  satisfied 
with  less  than  an  equal  value  in  return  (or,  what,  at 
any  rate,  appears  to  ourselves  equal  value  ;  for  even 
poor  Moses  Primrose  imagined  in  his  folly  that  his 
gross  of  green  spectacles  was  a  capital  bargain  for  his 
horse).  Whenever  then  two  men  strike  up  a  bargain, 
and  agree  to  an  exchange  of  goods,  each  of  them  is 
parting  with  something  that  he  has,  in  order  to  acquire 
some  other  thing  that  he  has  not  ;  and  whether  he  be 
satisfied  or  no  with  the  terms  of  the  bargain,  he  must 
assuredly  believe  that  what  he  gains  by  the  acquisition 
compensates  to  him  at  least  for  what  he  gives  up  ;  else 
as  a  free  agent,  and  possessed  of  his  proper  senses,  he 
would  never  have  concluded  the  bargain  at  all.    He  has 


VALUE  8i 

weighed  the  balance  of  advantage  in  his  mind  and  has 
not  found  it  wanting.  In  every  act  of  barter,  such 
an  equation  or  balancing  of  values  is  implied  ;  and 
before  we  can  grasp  the  meaning  of  exchange,  we  must 
decide  what  value  is. 

Value  is  a  term  common  enough  in  daily  use  ;  yet, 
as  in  the  case  of  wealth,  it  is  none  too  easy  to  define. 
One  thing  however  we  may  state  at  once.  Value  is  not 
an  absolute  or  permanent  quality  in  things.  A  thing 
ceases  to  have  any  value,  as  soon  as  men  cease 
altogether  to  want  it  ;*  the  picture  which  to-day 
fetches  a  thousand  pounds  at  Christie's,  may  a  century 
hence  be  consigned  to  the  lumber  room  as  rubbish. 
Values  change  as  men's  tastes  change  ;  and  different 
people  set  different  values  upon  the  self-same  thing. 
Thus  the  famous  pills  which  in  the  maker's  own  estimate 
are  well  worth  a  guinea  a  box,  are  to  be  bought  at  any 
chemists  for  the  sum  of  thirteen  pence.  Nor  for  that 
matter  must  it  be  concluded  that  money  is  a  true 
measure  of  value.  For  the  value  of  gold  and  silver 
itself  changes  and  has  fluctuated  in  the  course  of  a 
thousand  years  far  more  than  the  value  of  the  German 
mark  has  changed  in  the  course  of  three.  In  Solomon's 
time  the  very  abundance  of  silver  sufficed  to  make  it 
cheap  ;  and  in  our  own  day  the  same  influence  is  still 
at  work.  Silver  having  become  a  drug  on  the  market, 
a  currency  such  as  the  Chinese  tael  has  depreciated 
accordingly  ;  and  financiers  tell  us  that  the  same  is  true 
(though  less  decisively  and  less  continuously)  of  gold.f 
At  best  we  can  but  say  that  the  value  of  these  rarer 
metals  is  the  least  liable  to  change,  and  that  therefore 

•  It  may  of  course  retain  a  potential  value,  but  what  is  merely 
potential  is  not  fact. 

•fTo  be  exact,  the  influence  of  gold  production  upon  prices  does  not 
proceed  directly  from  the  law  of  supply  and  demand  ;  but  is  due 
to  the  effect  which  an  increase  of  currency  has  upon  credit,  that  is,  on 
men's  commercial  confidence.  Other  factors  may  therefore  enter  in 
which  will  restore  prices  to  their  previous  standard. 


82  NEW  FALLACIES  OF  MIDAS 

we  have  in  them  a  convenient  and  fairly  stable  standard 
by  which  to  measure  other  values. 

For  value  itself,   like  height   or  weight  or  sohdity, 
is  merely  a  measure  by  which  two  or  more  different 
things  can  be  compared.     When,  for  instance,  we  say 
that  a  motor-car  is  cheap,  we  are  making  a  mental 
comparison   with   other   motor-cars   which   are   dear  ; 
or  when  we  speak  of  precious  stones  we  are  thinking, 
though  we  may  not  know  it,  of  other  stones  which  are 
not  precious.     More  especially  is  a  comparison  implied, 
when  we  come  to  make  an  actual  purchase  or  exchange  ; 
for  then  a  positive  and  concrete  value  is   assigned   to 
what  we  buy  ;    and  a  definite  preference  for  one  thing 
over  other  things  declared.     A  simple  illustration  will 
make  this  clear  ;   and  (since  the  intrusion  of  money  only 
serves  to  obscure  the  issue),  let  us  take  the  illustration 
from  a  country  where  the  use  of  money  is  unknown,  and 
where  all  trade  is  done  by  barter.     Let  us  suppose  then 
that  a  native  of  this  benighted  country  proposes  to  do 
a   day's   work   for   a   neighbour.     In   return   for   this 
service  he  expects  of  course  some  definite  reward  ;   but 
what  reward  he  will  receive  is  within  certain  Hmits  a 
matter  of  his  personal  choice.     It  is  open  to  him  let  us 
say,  to  demand  a  loaf  of  bread,  or  a  pair  of  chopsticks 
or  a  nose-ring  or  an  assegai,  and  much  else  besides. 
After    due   reflection     he     elects     the    nose-ring    and 
thereby  he  declares  his  preference  for  this  particular 
satisfaction  as  against  other  alternative    satisfactions 
not  excluding  the  satisfaction  of  taking  a  holiday  and 
doing  no  work  at  all.     If  the  neighbour  agree  to  the 
deal,  and  the  bargain  then  goes  through,  he  has  given 
both  to  his  day's  work  and  to  the  nose-ring  a  value 
relative  to  all  rival  satisfactions  that  lie  at  his  command. 
Now,  in  every  act  of  exchange  the  same  takes  place. 
A  comparison  is  proposed  ;    a   preference  is   declared. 
By  the  sum-total  of  all  such  declared  preferences  the 
world's  scale  of  values  is  formulated  ;  yet  in  every  fresh 


VALUE  83 

declaration  of  preference  the  scale  of  \alues  is  mentally 
revised,  weighed  in  the  balance  and  fixed,  as  it  were, 
anew. 

Now,  if  the  preferences  of  men  were  stable 
and  constant,  values  would  be  constant  too  ;  but  values 
are  variable,  as  anyone  can  see  ;  and  for  the  simple 
reason  that  preferences  are  also  variable.  Why  prefer- 
ences should  so  vary,  it  must  now  be  our  business  to 
inquire. 

Let  us  take  an  illustration  once  again.  It  is  my  habit 
(being  a  man  of  simple  tastes)  to  drink  water  from  the 
local  spring,  and  every  day  I  journey  thither  to  fetch 
a  pailful  and  supply  my  want.  In  other  words  I  prefer 
the  trouble  of  a  single  journey  (but  not  more  than  a 
single  journey)  to  the  pain  of  leaving  my  thirst  unsatis- 
fied. Now  there  comes  a  hot  summer  ;  my  thirst 
increases  ;  and  I  decide  that  it  is  worth  while  to  fetch 
two  pailfuls  from  the  well  instead  of  one  ;  so  it  requires 
a  double  journey  and  a  double  sacrifice  of  energy  and 
time  to  allay  my  tiresome  thirst.  In  short,  because  my 
desire  is  more  intense  its  satisfaction  costs  me  dearer. 
As  however  the  season  advances,  a  drought  sets  in  ; 
and  when  at  last  the  cooler  weather  has  returned,  I  find 
my  well  dried  up.  I  am  now  content  with  a  single 
pailful,  but  I  must  travel  twice  the  distance  to  reach  the 
nearest  spring.  Once  again  the  satisfaction  of  my 
want  is  attained  at  twice  the  former  cost  ;  but  this  time 
it  costs  me  more  because  it  is  more  difficult  to  supply. 
In  both  cases  I  prefer  the  alternative  of  a  double  journey 
to  the  pain  of  unsatisfied  thirst.  The  cause  in  the  one 
case,  is  an  increased  desire,  the  cause  in  the  other  an 
increased  difficulty  of  supplying  it.  Here  then,  are 
two  different  influences  at  work,  the  influences  of 
Demand  and  Supply,  and  it  is  by  balancing  these  two 
influences  in  the  mind  the  one  against  the  other,  that 
all  preferences  whatsoever  are  determined.  In  other 
words,  when  I  know  how  much  I  want  a   thing,    and 


84  NEW  FALLACIES  OF  MIDAS 

also  how  hard  it  is  to  get  it,  I  know  just  what  it  is 
worth  to  me.  Then  I  can  say  "  so  much  labour  I  will 
give  for  it  or  so  many  pence,  but  not  a  stroke  of  labour 
or  a  penny  piece  more." 

Value  then  is  fixed  by  the  interplay  of  these  two 
factors,  supply  and  demand.     Neither  of  them  is  alone 
sufficient  to  determine  the  value  of  a  thing.     Intensity 
of  desire  will  not  of  itself  make  a  thing  dear.     The 
strongest  desire  which  can  exist  in  man  is  the  desire 
for  food  ;    yet  food  is  cheap  compared  with  diamonds, 
simply  because  to  supply  the  one  is  easy,  to  supply  the 
other  difficult.     Nor  on  the  other  hand  are  difficulties 
of  supply  enough  to  raise  the  value,  if  the  demand  is 
wanting.     The    first    edition    of   some    obsolete    epic 
may  be  as  rare  as  diamonds,  and,  if  there  were  a  large 
demand  for  the  books,  it  could  never  be  supplied.     But, 
since  nobody  has  much  interest  in  possessing  them,  they 
are  priced  at  half-a-crown  and  placed  on  the  book- 
seller's   back-shelves.     From    these    two   instances   it 
should  be  clear  that  value  is  fixed  not  by  supply  alone 
nor  by  demand  alone,  but  by  both  in  combination. 
They  are  complementary  to  each  other  like  the  two 
scales  on  a  sliding-rule.     On  the  one  side,  value  has  a 
tendency  to  rise  as    demand  goes  up,  and  to  fall  as 
demand  goes  down  ;    on  the  other  side  it    is   exactly 
the  reverse.     And  the  actual  price  that  a  man  will 
pay,  is  determined  by  the  point  at  which  the  two  scales 
meet.     For  then  the  measure  of  his  desire  is  exactly 
equated  to  the  measure  of  his  sacrifice  ;  the  satisfaction 
coincides  with  the  trouble  that  it  costs.* 

In  the  world's  markets,  just  as  in  the  individual's 
case,    the    twofold   influence    is    constantly    at  work. 

*  It  is  of  course  true  that  when  I  buy  a  ton  of  coal,  the  trouble  of 
procuring  it  is  not  mine  but  the  collier's.  But,  it  must  be  remembered 
that  I  give  him  something  for  the  coal,  and,  in  the  last  resort,  this  must 
represent  an  expenditure  of  energy  on  my  part  which  in  some  way  is 
equivalent  to  his.  The  case  of  enjoyment  which  I  do  not  earn  by 
personal  trouble  shall  be  considered  hereafter. 


VALUE  85 

There  the  sum-total  of  the  producers'  difficulties 
regulates  the  amount  of  the  supply,  while  the  sum- 
total  of  the  consumers'  desire  for  satisfaction  regulates 
the  intensit}'-  of  the  demand.  But  because  production 
depends  on  human  energies,  and  consumption  on 
human  desires,  and  because  desires  and  energies  react 
upon  each  other,  there  is  a  corresponding  interaction 
between  the  amount  of  supply  and  the  intensity  of 
demand.  If  supply  increases,  demand  is  almost  sure 
to  follow  suit.  When  the  price  of  tea  is  half-a-crown, 
my  monthly  allowance  is  no  more  than  a  pound  ;  but 
when  tea  is  plentiful  and  the  price  falls  to  one  and  six, 
I  shall  double  my  allowance  and  thus  my  demand  will 
have  increased,  the  cost  of  its  satisfaction  being  enlarged 
to  the  length  of  sixpence.  In  the  same  way  demand 
will  have  its  influence  on  Supply.  When  the  manu- 
facturer perceives  that  the  public  wants  more  boots 
than  it  actually  gets  he  does  not  maintain  his  out-put 
at  its  former  level  and  take  advantage  of  increased 
demand  by  putting  up  the  price,  he  will  augment  his 
out-put  even  though  the  increase  of  supply  will  lower 
the  value  of  the  boots.  So  in  general  the  best  way  to 
stimulate  production  is  to  increase  consumption,  and 
the  best  way  to  stimulate  consumption  is  to  provide 
men  with  plenty  to  consume.  To  the  action  and 
reaction  of  these  two  complementary  economic  forces 
there  is  no  discoverable  end. 

There  is  however  a  tendency  in  human  nature 
(common  both  to  producers  and  consumers  alike), 
which  in  some  measure  limits  and  impedes  the  natural 
and  free  development  of  these  economic  laws — I  mean 
the  tendency  to  standardise  values.  A  doctor's  fee 
is  a  guinea  and  neither  more  nor  less,  whether  I  call 
him  in  to  save  me  from  death  by  poison  or  to  lance  a 
painful  corn.  Books  of  the  same  quality  and  size  are 
more  in  demand  at  London  than  they  are  at  Manchester, 
bicycles  may  be  are  bought   more  freely  in  Denmark 


86  NEW  FALLACIES  OF  MIDAS 

than  they  are  in  Sweden  ;  yet  the  price  remains  the 
same  in  one  place  as  in  the  other*.  Or  again,  a  lady 
who  goes  shopping  will  refuse  an  article  the  price  of 
which  has  risen,  not  be  cause  the  price  is  beyond  her 
purse,  nor  because  it  is  more  than  the  article  is  worth  to 
her,  but  siinply  because  she  regards  the  price  as  unusual, 
exorbitant,  unfair.  In  one  and  the  other  case,  the 
producer  or  consumer  is  endeavouring  (for  whatever  be 
his  or  her  own  reason)  to  maintain  prices  at  their  normal 
level.  Partly  perhaps,  this  tendency  is  due  to  an 
innate  conservatism  which  clings  to  the  conveniences 
of  custom  ;  for  men  are  the  slaves  of  habit,  and  will 
continue  to  charge  a  price  or  accept  a  wage,  long  after 
the  wage  or  price  have  lost  all  relation  to  the  actual 
conditions  of  supply  and  demand  :  but  even  more  it  is 
due,  I  think,  to  a  sense  of  corporate  loyalty,  a  certain 
esprit  de  corps,  which  will  not  allow  a  man  to  outbid 
or  undersell  his  neighbour.  When  the  village  milkman 
refuses  to  take  advantage  of  a  local  and  temporary 
scarcity  of  milk  it  is  because  his  sense  of  decency  forbids 
the  exploitation  of  his  neighbour's  need.  For  a 
similar  reason  he  does  not  try  to  increase  his  custom 
by  lowering  the  price  of  his  butter  simply  because  he 
does  not  wish  to  steal  a  march  on  rival  farmers. 

Let  us  not  be  mistaken.  Values  are  fixed  and 
preferences  determined  not  by  soulless  cipher-mongers 
and  abstract  formulae,  but  by  human  beings  with 
human  virtues  as  well  as  human  weaknesses.  Ex- 
changes are  not  always  made  (as  some  theorists 
have  fancied)  in  a  spirit  of  calculated  self-interest  and 
cold  intelhgence.  In  business,  as  in  other  spheres  of 
life,  men  are  swayed  by  a  variety  of  passions,  fancies  and 
ideals.  These  have  their  origin  in  part  in  the  defects  of 
our  wisdom  or  our  will ;  such  are  the  errors  of  a  hasty 

*  If  we  allow  for  the  addition  to  the  price  which  is  due  to  the  cost 
of  transport,  this  standardisation  of  prices  would  be  found  to  have  a 
far  wider  application  than  might  at  first  appear. 


VALUE  Sj 

or  deluded  judgment,  baseless  fears  of  scarcity  or  hopes 
of  plenty,  imaginary  doubts  of  others'  honesty  or 
unreflective  assurance  of  our  own,  easy-going  adher- 
ence to  fashion,  custom  or  tradition,  love  of  notoriety' 
or  dread  of  public  censure.  Other  motives  are  more 
worthy  ;  pride  in  good  craftmanship,  sense  of  honour, 
loyalty  and  fair-play,  even  the  softer  impulses  of 
charity  and  pity  ;  these  also  play  their  part.  There 
are  a  thousand  springs  of  human  action  which  defy 
scientific  analysis,  and  interfere  with  the  working  of 
purely  economic  laws.  And  indeed,  when  we  speak 
glibly  of  a"  fair  price  "  or  a  "  just  wage  "we  little  know 
how  much  is  presupposed  in  such  a  phrase.  To  assess 
the  ideal  value  of  a  single  thing  would  call  in  reality 
for  a  iTian  possessed  not  only  of  perfect  taste,  but  of 
complete  omniscience  and  absolute  integrity  as  well. 
Even  then  it  must  not  be  forgotten  that  it  takes  two 
to  make  a  bargain,  and  if  a  pair  of  such  paragons  were 
ever  found,  they  would  probably  prefer  the  more 
generous  methods  of  the  Utopian  people  or  of  the 
Early  Christian  Saints. 

Nevertheless  we  know  that  with  the  best  will  in  the 
world  no  modern  state  or  society  could  exist  for  a  day 
upon  that  simple-minded  pattern;  The  working  of  our 
industries  and  great  commercial  houses  by  which 
crowded  cities  and  scattered  colonies  are  now  supplied, 
would  be  impossible  without  the  widespread  net- 
work of  credit  and  exchange  which  is  the  arterial 
system  of  the  economic  world.  And,  were  some 
sudden  catastrophe  or  revolution  to  destroy  credit 
and  check  the  flow  of  markets,  then  disaster  would 
as  surely  follow  as  death  must  come  to  the  body 
when  the  circulation  of  the  blood  is  stopped.  Exchange 
then  must  continue,  if  men  are  to  live  in  decency  and 
comfort  ;  and  for  a  standard  of  exchange  we  must 
further  have  money  tokens.  So  long  therefore  as 
this  is   the   way   of  the   world,    men   will   retain   their 


88  NEW  FALLACIES  OF  MIDAS 

power  to  profit  by  each  other's  ignorance  or  need; 
salesmen  will  be  able  to  exploit  their  customer's 
credulity  ;  in  every  deal  there  will  be  opportunity 
to  haggle,  bluff  and  over-reach.  Yet  in  the  long  run 
such  methods  will  bring  no  permanent  advantage; 
they  are  bad  business  as  well  as  bad  morality  ;  and 
immediate  gains  can  never  compensate  for  a  tarnished 
reputation.  For  at  bottom  all  trade  is  built  upon 
a  basis  of  mutual  trust  and  reciprocal  good-will. 
The  more  each  party  to  a  bargain  is  persuaded  of  the 
other's  honesty  of  purpose,  the  more  willing  will  each 
be  to  make  the  venture,  and  thus  the  more  will  the 
volume  of  the  trade  swell  and  prosperity  be  increased. 
Men  will  naturally  prefer  to  deal  with  those  who  make 
it  a  point  of  honour  to  give  value  for  value,  laying  all 
their  cards  squarely  on  the  table,  and  offering  their 
goods  for  precisely  what  they  are.  Nor  will  the  fair 
minded  man  of  business  seek  to  conceal  his  profits  (not 
even  from  the  men  whom  he  employs)  ;  for  the  profits 
he  demands  will  be  in  accordance  with  the  services 
he  has  rendered  and  the  risks  he  has  run.  There  can, 
it  is  true,  be  no  hard  and  fast  canon  of  economic 
justice  ;  but  equity  there  certainly  can  be.  Given 
sufficient  knowledge,  we  can  tell  what  price  is  fair 
and  what  unfair,  what  profits  are  reasonable,  and 
what  are  not.  This  is  a  truism  to-day.  The  last 
half  century  has  witnessed  a  great  change  in  the  ethics 
of  the  markets ;  "  caveat  emptor  "  is  now  a  discredited 
motto  ;  open  dealing  and, frank  publicity  is  the  recog- 
nised code  of  all  reputable  traders,  nor  is  there  any 
lack  of  generous  or  even  altruistic  effort  in  the  business 
world.  Yet  much  remains  of  which  we  have  small 
reason  to  be  proud.  Profiteering  which  is  discoun- 
teranced  in  war-time,  is  still  considered  by  many  to  be 
legitimate  in  peace.  There  is  plenty  of  dissimulation  and 
sharp  practice  which  is  every  whit  as  vicious  as  open 
fraud.     But,  though  money  must  for  all  time  be  the  root 


VALUE  89 

of  many  evils,  it  is  not  by  abolishing  money  that  we  can 
hope  to  be  rid  of  them.  The  old  rules  of  commerce 
must  still  stand;  only  they  must  be  observed  in 
the  spirit  of  liberality  and  fair  dealing,  rather  than 
according  to  a  niggardly  interpretation  of  the  letter. 
We  must  substitute  a  positive  zeal  for  justice  where 
we  have  been  content  in  the  past  with  a  negative 
avoidance  of  its  breach. 


Chapter   XI 

MONOPOLY. 

The  mathematical  novice,  who  aspires  to  probe  the 
mysteries  of  gravity  and  motion,  is  introduced  at  the 
outset    of   his   studies    to    a   strange    world,   in   which 
ponderous     bodies     glide     and     swing     untrammelled 
through  spaces  completely  innocent  of  friction.      But, 
mathematics  being  as  it  is  an  abstract  science,  the  theory 
of  dynamic  laws  fits  very    ill  with  fact  ;    friction  exists 
in  all  known  spaces  and  in  all  known  things  ;    and  the 
movements  of  natural  objects  are  found  by  the  novice 
to  be  after  all  no  better  than  loose  approximations 
to   the    mathematical   ideal.     How    much    more   then 
fact    must    play    havoc    with    the     vaguer     formulae 
of  economic  science,  will  be  readily  understood.     Here 
there  will  be  obstructions,    hindrances,    impediments 
of   every   sort    and   kind.     The    vagaries    of    human 
intellects  and  human  passions  will,  as  we  have  seen, 
defy   our   most   careful   calculations.     Political   forces 
too   will  interfere   with   even   more   visible   effect.     A 
Government  places  a  tax  on  foreign  imports  and  the 
natural  currents  of  supply  are  interrupted  at  a  blow  ; 
artificial   limitations   are   imposed   upon   the   price   of 
jam  or  sugar  ;    and  the  whole  basis  of  evaluation 'will 
be  completely  undermined.     In  short,  if  we  would  hope 
to  see  our  economic  laws  hold  valid,  and  the  rise  and 
fall  of  prices  correspond  at  all  nearly    to    the    ideal 
principles  of  supply  and  demand,   then  we  must  do, 
as   the   mathematicans   do,    and  banish  friction,    or   at 
least,   so   far  as  we    may,    reduce   it    to    a    minimum. 

90 


MONOPOLY  91 

External  and  obstructive  influences  must  be  elimina- 
ted, if  the  economic  machine  is  to  have  free  play 
and  its  wheels  run  smoothl3^  Now  the  solvent  that 
can  best  ease  them  in  their  working,  is  liberty  of 
competition  ;  and  the  obstacle  which  clogs  them  most, 
is  its  reverse  and  opposite,  monopoly. 

The  monopolist  is  the  autocrat  of  the  market  place  ; 
whether  the  use  he  makes  of  his  power  be  wise 
or  unwise  depends  on  circumstances  ;  but  in  any  case, 
like  his  political  counterpart,  he  is  seldom  trusted. 
For  his  power  is  a  kind  of  blank  cheque  on  human 
patience  ;  and  mankind  is  not  unnaturally  suspicious 
of  an  overdraft.  We  may  suspect  that  the  first  man 
who  attempted  a  "  corner  "  in  food,  was  lynched  by 
his  neighbours  without  shrift  or  ceremony  ;  and, 
though  he  himself  may  have  had  no  intention  of 
starving  them  at  all,  they  were  at  any  rate  acting  on 
the  safe  side  if  they  did  not  wait  to  see.  Indeed  there  is 
something  unnatural  in  this  attempt  to  cut  the  channels 
of  supply  and  hold  the  world  to  ransom.  So,  whenever 
men  have  been  politically  free,  they  have  suppressed 
monopolies  severely.  It  is  only  when  the  authority 
of  law  has  been  perverted  from  its  proper  uses,  that 
this  dangerous  power  has  been  allowed  to  pass  into 
the  hands  of  individuals.  In  Stuart  and  Tudor  times, 
for  instance,  the  Crown  dispensed  monopolies  in  soap, 
or  linen  or  tobacco,  as  a  mark  of  royal  favour  or  for 
the  filling  of  the  royal  purse  ;  but  with  the  growth  of 
democratic  institutions,  the  practice  was  disallowed, 
and  now,  while  Government  may  itself  assume 
unique  control  of  such  public  services  as  the  telegraph 
or  the  post,  or  grant  a  privileged  position  to  private 
companies  (such  as  those  which  own  the  gas-works 
or  the  railways)  under  very  definite  restrictions,  yet  in 
other  spheres  its  authority  is  no  longer  exercised  in 
favour  of  private  monopolies,  but  in  the  interests  of 
free  competition. 


92  NEW  FALLACIES  OF  MIDAS 

But,    though    monopoly,    in    the    more    strict    and 
literal  sense  cf  the  word,  has  seldom  been  long  tolerated 
in  free  countries,  it  has  often  existed  in  disguised  or 
partial  forms.     Two   types   are  chiefly  to   be   noted  ; 
and  of  these  the  first  is  one    which  we   may  call  the 
monopoly    of    collusion.     Now,    whatever    else    com- 
petition   may   imply,    it    certainly   implies    that    each 
competitor    should    do    his    best    to    outstrip    rivals. 
The  race  in  which  the  favourite  agrees  with  his  adver- 
sary to  run  a  dead  heat,  is  no  race  at  all  ;   and  similarly 
it  is  required  of  competitors  that  at  least  they  should 
compete.     If  all  the  producers  of  some  article  which 
is  necessary  to  the  consumer  agree  to  make  common 
cause   they   have   the   consumer   completely   at    their 
mercy  ;    for  the  monopoly  of  twenty  or  two  hundred 
resolute  men  is  no  weaker  than  the   monopoly  of  one. 
Such  unions,   appearing  recently  under  the  name   of 
Trusts,  Combines  or  Trade  Rings,  have  usually  been 
defeated    or    at    least    restricted    in    their    operation. 
But,   though  open  attempts  at  combination  have  in 
general  been  discountenanced  by  law,  there  is  nothing 
to  prevent  manufacturers  or  merchants  from  forming 
some     mutual     understanding     on     the    sly.     Indeed, 
without  the  least  intent  to  act  unjustly  towards  the 
public,  it  is  not  unnatural  if  realising  the  community 
of  their  interests  they  should  come  to  feel  a  certain 
instinct  of  loyalty  towards  one  another.     But  whatever 
the  motive  of  their  co-operation,   there  can  be  httle 
doubt  that  it  may  gravely  prejudice  the  free  play  of 
the  competitive  market,  and  that  the  level  of  prices 
may  be  artificially  sustained  at  the  consumer's  expense. 
The  hberty  to  unite,  Hke  all  other  liberties,  is  only 
legitimate  so  long  as  it  is  not  used  to  the  public  detri- 
ment ;     and   it   is    sometimes   forgotten,    even  by  the 
most  ardent  champions  of  liberty,  that  a  group  may 
misuse  a  monopoly  as  \\ell  as  a  person  ;    a  hundred 
thousand  pitmen  who  agree  to  go  on  strike  may  be 


MONOPOLY  93 

exercising  a  power  no  less  tyrannical  than  the  millionaire 
mine-owner  who  makes  a  corner  in  coal.* 

There  is  a  second  form  ot  virtual  or  disguised  mon- 
opoly which  we  may  call  the  monopoly  of  isolation  ; 
and  here  at  any  rate  it  is  nature  and  not  man  that 
is  to  blame.  The  world  has  not  been  so  arranged  as 
to  make  competition  easy  ;  and  the  artificial  restraints 
to  which  we  have  just  alluded,  are  slight  as  compared 
with  the  physical  and  geographical  impediments. 
Now-a-days,  oceans,  lakes  and  rivers  are  considered  an 
aid  to  commerce  ;  but  they  have  often  been  equally 
a  hindrance.  Islanders  have  had  to  suffer  the  penalty 
of  their  position ;  it  does  not  benefit  them  that  timber 
should  be  abundant  on  the  mainland  if  there  are  no 
boats  large  enough  or  strong  enough  to  bring  it  over. 
So  the  man  who  owns  the  one  plantation  in  the 
island,  will  be  a  monopolist  as  much  as  if  it  were  the 
one  plantation  in  the  world.  That  is  an  extreme 
instance  ;  and  local  monopolies  of  so  complete  a 
character  are  rare  ;  but  so  long  as  space  exists  and  the 
difficulties  of  transportation  are  incompletely  met  by 
man's  contrivances,  competition  cannot  become 
entirely  free.  Even,  as  things  stand  to-day,  agricul- 
turalists are  generally  dependent  upon  a  single  railway 
for  the  conveyance  of  their  produce,  and  were  it  not 
for  the  protection  of  State  interference,  they  would  be 
at  the  mercy  of  a  monopolist  company  which  could 
raise  freight-dues  at  its  pleasure.  Much  more  were 
men  liable  to  exploitation  in  the  days  before  steam  and 
motor  transit  was  invented.  Then,  competition  was 
limited  to  narrow  areas  ;  and  where  states  and  cities  and 
even  villages  lived  in  economic  isolation,   and  were  for 

•  It  is  obvious  that  "  co-operation  "  of  this  sort,  used  for  the  benefit 
of  the  few  and  to  the  detriment  of  the  many,  has  nothing  in  common 
with  the  co-operation  of  the  beneficent  sort,  which  is  used  for  the  good  of 
all.  Furthermore,  just  as  free  competition  is  preferable  to  monopoly 
which  is  misused,  so  true  co-operation  may  be  better  than  competition 
that  is  carried  to  excess. 


94  NE\\'  FALLACIES  OF  MIDAS 

V 

the  most  part  dependent  on  their  own  resources,  the 
opportunities  of  local  monopoly  were  far  greater  than 
in  these  days  of  world-wide  commerce  and  cosmo- 
politan finance.  The  miller  who  had  sole  possession  of 
the  local  stream  could  afford  to  snap  his  fingers 
at  competitors  in  the  next  valley,  if  a  range  of  steep 
mountains  lay  between  them  ;  even  a  doctor  need 
have  little  fear  of  rivals,  the  nearest  of  whom  lived 
fifty  miles  away.  And  if  in  the  Middle  Ages  the  power 
of  monopoly  was  used  with  moderation,  whether  by 
individuals  or  by  the  Guilds-men  groups,  this  was 
chiefly  due  to  a  sense  of  neighbourliness  and  civic 
loyalty,  partly  perhaps  to  a  dread  of  public  censure. 
For  under  the  conditions  of  those  days,  the  results 
of  misused  monopoly  were  far  more  obvious  and  glaring 
and  the  popular  reaction  against  it  far  more  swift. 

Competition  then,  whether  in  past  or  present, 
has  never  been  entirely  free  from  the  two-fold  inter- 
ference of  isolation  and  collusion.  Monopoly,  under 
one  disguise  or  another,  is  perpetually  creeping  in  ; 
endured  may  be  for  a  while,  but  in  the  end  almost 
certainly  defeated.  Yet  monopoly,  even  while  it 
lasts,  is  not  of  necessity  the  dangerous  power  it 
would  appear.  Not  every  monopolist  can  press  his 
advantage  to  the  full  ;  nor  would  such  a  course  be 
to  his  interest.  It  does  not  pay  to  put  up  the  price 
of  goods,  if  the  consumer  is  thereby  deterred  from 
buying  them.  Few  people,  for  instance,  would  care 
to  pay  a  pound  apiece  for  pineapples  ;  and  if  a  man 
who  had  cornered  tropical  supplies,  attempted  to 
extract  that  price,  the  demand  would  automatically 
cease  ;  the  monopolist  would  find  no  market  for  his 
fruit.  It  is  only  when  a  monopoly  is  held  over  the 
more  immediate  necessities  of  civilised  existence, 
that  the  power  is  likely  to  be  seriously  abused.  A 
monopolist,  let  us  say,  in  corn,  or  meat  or  cotton 
might  prove  an  intolerable  despot ;    the  case  of  iron 

\ 


MONOPOLY  95 

or  coal  would  be  as  bad  ;  but  without  doubt  the  most 
formidable  of  all  is  the  monopoHst  of  land.  Land  is, 
as  we  know,  the  source  of  all  production  ;  the  owner 
of  it  controls  not  the  supply  of  food  and  clothing 
only,  but  of  minerals  as  well.  He  can  do  more  than 
interrupt  the  normal  flow  of  markets  ;  he  can,  if  he 
chooses,  empty  them  altogether.  And,  if  his  monopoly 
is  complete  and  exclusive,  he .  is  in  truth  a  very 
dangerous  person. 

Now,  although  the  social  and  economic  changes  of 
the  last  few  hundred  years  have  made  such  monopoUes 
in  land  well  nigh  impossible  to-day,  there  have  been 
times  when  they  existed,  and  when  their  influence 
upon  society  was  incalculably  great.  The  isolation 
of  mediaeval  communities,  to  which  we  referred  above, 
put  into  the  hands  of  the  large  land  owners  a  power 
which  was  almost  unUmited.  By  means  of  it,  the 
feudal  baron  was  able  to  reduce  his  neighbours  to  the 
condition  of  helpless  serfs.  He  controlled  the  sources 
of  all  livelihood,  he  could  ask  what  terms  he  pleased 
for  the  right  of  access  to  them  ;  in  fact,  he  held  a 
monopoly  of  the  strictest  sort  and  did  not  scruple  to 
use  it.  The  social  and  political  privileges  which  he 
enjoyed,  were  built  in  part  upon  the  basis  of  this 
economic  supremacy,  and  these  were  in  their  turn 
employed  to  reinforce  it.  For  not  content  with  the 
advantages  of  natural  isolation,  he  endeavoured  to 
increase  his  hold  over  the  servile  classes  by  open  collu- 
sion with  his  brother  barons  who  were  also  his  possible 
competitors.  Laws  and  customs  were  evolved  by 
which  a  peasant  was  denied  the  right  of  quitting  the 
estate  on  which  he  Hved  ;  and,  thus  tethered  to  the 
soil,  the  wretched  man  had  but  two  alternatives  before 
him — to  accept  whatever  terms  his  lord  might  offer 
or  to  starve.  The  triumph  of  monopoly  was  complete, 
for  under  Feudalism,  the  peasant's  economic  hbcrty, 
like  his  political  liberty,  was  dead. 


96  NEW  FALLACIES  OF  MIDAS 

Times  have  changed;  little  by  little  the  artificial 
barriers  of  feudal  tenure  have  been  done  away ; 
estates  have  been  broken  up  and  land  is  now  more 
widely  and  evenly  Distributed,*  more  important  still, 
new  continents  have  entered  into  rivalry  with  the  old  ; 
new  methods  of  transport  have  quickened  competition 
all  the  world  over  ;  and  the  English  landowner  must 
now  acknowledge  his  defeat  by  colonists  across  the 
seas.  Monopoly  in  the  old  sense  is  no  longer  possible  ; 
but  though  the  worst  menace  of  landownership  is 
gone,  its  power  has  been  revived  in  a  different  fashion. 
The  old  monopolist  became  a  tyrant,  because  industrial 
progress  was  slow ;  but  the  modern  monopolist 
becomes  a  plutocrat  because  industrial  progress 
has  been  swift.  For  the  sudden  development  of 
industry  which  took  place  during  the  last  hundred 
years,  has  given  to  land  a  new  and,  as  it  were,  a  con- 
centrated value.  For  it  drove  two-thirds  of  the  working 
population  out  of  the  country  into  the  towns.  Now 
manufacture  must  naturally  centre  round  the  sites 
where  clay  or  metal  are  to  be  found  or  where  raw 
material  can  be  easily  imported  ;  merchants  and 
transport  workers  must  naturally  congregate  where 
harbours  or  rivers  offer  convenient  anchorage 
for  ships.  And,  as  commerce  and  manufacture  in- 
creased with  unprecedented  strides,  the  old  towns 
extended  their  boundaries,  new  towns  sprang  up. 
Factories,  warehouses,  smelting- works,  rich  men's 
mansions,  and  poor  men's  tenements  had  to  be 
built  and  they  must  be  built  on  somebody's  land.  Space 
is  needed  at  whatever  cost  ;  and  it  must  be  space  here 
upon  the  spot  and  not  at  two  miles  distance.  So  the 
man  who  bought  a  hundred  acres  years  ago  as  grazing 

*  The  beginning  of  the  nineteenth  century,  however,  witnessed  a 
new  and  deplorable  tendency  towards  the  formation  of  large  estates  : 
the  yeoman-farmer  was  largely  dispossessed  in  favour  of  the  land  -lord, 
and  it  is  only  lately  that  the  tidehas  set  in  the  opposite  direction,  and 
small  holdings  have  begun  to  be  common. 


MONOPOLY  97 

ground  for  cattle,  now  finds  himself  in  the  favoured 
position  of  a  monopolist.  He  has  no  competitors, 
for  he  can  supply  what  is  urgently  needed,  and  nobody 
else  can  ;  and  if  he  makes  the  most  of  his  chances,  he 
may  reap"  an  immense  and  even  a  fabulous  return  by  the 
exaction  of  ground  rentals  ;  or  (if  minerals  are  found 
upon  his  land)  of  royalties.  Riches  flow  in  upon  him 
through  no  trouble  or  virtue  of  his  own  (unless  it  were 
the  gift  of  prophecy).  Without  himself  lifting  a  finger 
or  doing  a  stroke  of  honest  work,  he  finds  his  income 
multiplied  a  hundred  or  a  thousand  fold.  And  his 
case  is  common  enough  ;  this  is  no  imaginary  or 
exaggerated  picture.  Many  of  the  wealthiest  men  in 
the  world  to-day  owe  their  huge  fortunes  to  some  such 
lucky  accident  or  gift  of  brilliant  foresight ;  and  the 
millions  upon  millions  paid  by  the  tenants  and  lease- 
holders of  our  great  towns  are  the  "  unearned  incre- 
ment "  of  these  latter  day  monopolists. 

We  will  not  waste  words  here  over  a  justification  of 
the  Rights  of  Property.  Men  have  debated  long  and 
will  probably  debate  still  longer,  whether  land  owner- 
ship is  an  inalienable  right  or  an  intolerable  abuse,  an 
obsolete  relic  of  aristocratic  privilege  or  a  natural 
institution  which  cannot  be  violated  without  grave 
prejudice  to  the  common  weal.  In  this  case  of  un- 
earned increment  however,  we  must  admit  that  there 
is  excuse,  if  anywhere,  for  interference.  Govern- 
ments which  have  dealt  with  monopoly  in  other  forms, 
may  surely  deal  also  with  monopoly  in  land  ;  it  is 
their  right  at  least,  if  not  their  duty  ;  and  the  Socialist 
would  maintain  that  it  is  both  ;  he  would  deny  the 
title  of  any  individual  to  take  so  exorbitant  a  toll  of  the 
wealth  of  the  community  and  yet  himself  do  nothing 
to  deserve  it, — nay,  he  would  go  further  still  and 
condemn  all  rent  as  unjustifiable  extortion.  What 
right,  he  will  say,  has  one  man  to  benefit  by  nature's 
gifts  which  he  does  not  use  himself,  because  another 


q8  NEW  FALLACIES  OF  MIDAS 

wishes  to  use  them — to  share  the  profit  but  not  to 
share  the  toil  ?  It  is  as  though  the  village  water-man 
were  to  take  possession  of  the  spring,  and  henceforth 
instead  of  asking  payment  for  water  delivered  at  our 
doors,  were  to  sit  idle  by  the  well  mouth  and  exact  a 
fee  for  every  bucket  drawn.  Value,  as  we  have 
agreed,  is  proportionate  to  the  difficulty  of  supply. 
The  depth  of  the  well,  the  weight  of  the  bucket,  the 
length  of  the  road,  these  are  natural  obstacles  which 
can  only  be  overcome  by  human  labour,  and  which 
therefore  may  very  properly  regulate  the  water's 
price.  But  to  add  this  further  obstacle  of  the  owner's 
tax  is  both  unnatural  and  unnecessary.  In  short, 
says  the  Socialist,  abolish  rent,  take  land  from  private 
persons,  hand  it  over  to  the  State,  and  then  at  last  will 
value  be  regulated  no  longer  by  the  land-owners' 
rapacity,  but  solely  by  the  services  rendered  by  the 
labour  or  the  skill  of  men.  Unearned  incomes  would 
disappear  ;  only  the  earned  remain,  and  we  shall  be 
troubled  by  monopolists  no  more.  Our  Socialist's 
reform  is  sweeping  ;  he  has  spread  his  net  cunningly 
and  he  has  drawn  it  wide  ;  but  if  he  thinks  thereby  to 
catch  all  the  big  tyrant  fishes  of  the  sea,  he  is  certainly 
mistaken  for,  as  shall  be  seen,  he  has  not  drawn  it 
nearly  wide  enough  for  that. 

ft 

Note  on  Ricardo's  Theory  of  Rent. 

If,  upon  the  Socialist  plan,  the  State  were  to  take 
control  of  the  land  and  to  let  it  out  to  tenants  at  a 
reduced  rent  or  even  at  no  rent  at  all,  it  is  a  natural  pre- 
sumption that  the  prices  of  produce  would  be  lowered, 
and  the  consumer  would  score.  But  the  matter  is  not 
so  simple  as  that,  and  if  the  theory  put  forward  by 
Ricardo  is  correct,  such  an  idea  is  pure  delusion.  Accord- 
ing to  his  view,  the  price  of  corn  is  determined  solely 
by  the  initial  cost  of  producing  it,  that  is,  by  the  cost 
of  seed,   implements,  manure  and,   above  all,  by  the 


MONOPOLY  99 

labour  of  man  and  beast,  but  not  by  rent.  It  follows, 
therefore,  that  however  much  rents  may  be  raised  or 
lowered,  the  price  of  corn  will  still  remain  the  same. 

Now,  in  order  to  grasp  Ricardo's  theory,  let  us  first 
observe  that  lands  differ  in  fertility  ;  some  produce 
corn  more  freely  than  others,  and  on  these  the  cost  of 
growing  a  bushel  of  corn  will  be  proportionately  less. 
Is  the  price  of  corn  then  fixed  by  the  cost  of  growing  it 
on  the  richest  land  or  on  the  poorest  ?  Is  it  Sir  Midas 
Mucklethwaite,  owner  of  the  most  fertile  farm  in 
England,  who  sets  the  standard  of  the  market  ?  Oddly 
enough,  no  ;  it  is  an  obscure  Irishman  who  has  recently 
broken  up  a  few  acres  of  common  land  in  County  Cork 
and  farms  them  rent  free  at  a  trifling  profit.  And  the 
reason  of  this  paradox  is  as  follows  :  that  since  the 
land  is  poor,  Patrick's  corn  will  cost  more  to  grow, 
and,  unless  (which  in  a  poor  man  in  unlikely)  he  is 
prepared  to  grow  it  at  a  loss,  his  selling  price  must  be 
necessarily  high.  This  is  unpleasant  for  the  con- 
sumer, ,and  yet  he  must  pay  it,  and  for  a  very  good 
reason.  For  with  our  growing  population  there  is  an 
increased  demand  for  corn  ;  and  since  somebody  needs 
Patrick's  corn  to  satisfy  his  hunger,  somebody  must  of 
necessity  pay  the  price  that  Patrick  asks.  Meanwhile, 
Sir  Midas,  though  he  could  well  afford  to  sell  his  own 
corn  cheaper,  cannot  bear  to  be  out-done  by  Patrick 
(and  indeed  why  should  he  ?)  so  he  raises  his  price 
also  up  to  Patrick's  level.  Thus,  the  standard  of  the 
market  is  not  set  by  him  at  all,  but  by  his  poorest  rival. 
The  surplus  profit  which  Sir  Midas  obtains,  is  the 
reward  of  owning  his  more  fertile  land. 

If  we  agree  with  Ricardo  so  far,  let  us  now  enquire 
what  is  the  value  of  Sir  Midas'  land  ;  what  is  its 
superior  quality  worth  as  compared  with  land  like 
Patrick's  which  can  be  had  for  nothing  ?  or,  in  plain 
language,  what  is  the  rent  which  Patrick  (or  for  that 
matter  anyone  else)  would  have  to  pay  for  the  use  of 


100  NEW  FALLACIES  OF  MIDAS 

it  ?  Clearly  the  rent  will  be  the  exact  equivalent  of 
the  surplus  profit  abo<^e  mentioned — the  difference, 
that  is,  between  the  production  cost  of  Sir  Midas' 
corn  on  the  one  hand,  and  the  selling  price  of  Patrick's 
corn  on  the  other.  More  Sir  Midas  cannot  ask,  for 
that  would  be  to  reduce  the  tenant's  profit  below  what 
the  tenant  could  make  by  farming  common  land  in 
County  Cork,  and  this,  as  we  have  seen,  would  mean 
sheer  loss  to  the  tenant.  Less  Sir  Midas  can  of  course 
ask  if  he  chooses  ;  but  that  would  be  to  raise  the 
tenant's  profit  above  what  he  could  make  by  farming 
common  land  in  County  Cork  ;  a  gratuitous  benevo- 
lence on  Sir  Midas'  part,  since  Patrick,  if  he  got  the 
chance,  would  certainly  be  ready  to  make  a  higher 
bid.  Nor  would  Sir  Midas'  benevolence  affect  the  price 
which  the  consumer  pays  for  corn — it  would  merely 
put  a  portion  of  the  surplus  profit  into  the  tenant's 
pocket  from  his  own. 

Nor  will  it  be  otherwise,  if  the  State  were  to  become 
landowner  in  Sir  Midas'  place  ;  it  would  be  powerless 
to  reduce  the  selling  price  of  produce  from  the  land. 
Hence  it  comes  that  Henry  George,  the  American,  was 
opposed  to  the  Socialist  scheme  of  nationalising  the 
land  ;  and  proposed  an  alternative  which  many 
thinkers  have  adopted.  Their  idea  is  to  tax  all  land 
upon  its  rent-value,  taking  all  or  most  of  what  the 
landowner  receives.  If  this  were  done,  there  would  be 
no  special  advantage  in  owning  rich  land,  no  special 
handicap  in  owning  poor  land  ;  all  owners  alike  would 
start,  as  it  were,  at  scratch  ;  their  profits. would  depend 
solely  upon  their  own  exertions  (as  was  the  case  with 
Patrick's  farm)  and  finally  the  surplus  value  of  all 
lands  richer  than  the  meanest  common  land,  would 
pass  into  the  public  purse  for  the  benefit  of  the 
community  at  large. 

At  first  sight  Ricardo's  theory  is  extraordinarily 
convincing  ;    and  George's  is  a  natural  corollary  of  its 


MONOPOLY  loi 

acceptance.  Nevertheless  most  people  are  unconvinced 
or  at  any  rate  unconverted.  The  Land  Tax  method 
would  probably  break  down  for  a  reason  which  we  shall 
examine  presently.  This  is  the  difficulty  which  would 
inevitably  arise  in  discriminating  between  the  value  of 
land  pure  and  simple,  and  the  accessory  value,  which 
is  due  to  man's  exertions.  After  all.  Sir  Midas  has  not 
been  idle  during  all  his  years  of  ownership,  he  has  at 
least  done  something  for  the  soil  ;  tilled  it,  manured  it, 
hedged  it  in  and  planted  it  with  timber.  Besides  this 
he  has  built  barns  and  yards  and  cottages  on  the  estate  ; 
developed  roads  and  fitted  them  with  gates.  A  thriv- 
ing farm  possesses  much  beyond  the  natural  fertility 
of  its  soil  ;  and  to  estimate  what  proportion  of  its 
value  is  due  to  nature,  what  to  the  work  of  man, 
would  be  a  task  which  not  even  the  most  scrupulous 
assessor  could  perform  with  perfect  justice. 

But  there  is  a  still  more  vital  objection  to  Ricardo's 
theory,  namely,  that  it  does  not  fit  with  the  facts.  He 
wrote,  it  is  true,  when  the  pressing  needs  of  our  growing 
population  was  forcing  men  to  cultivate  poor  Irish 
soil  :  and,  if  the  possibility  of  expanding  agricultural 
production  had  in  truth  been  limited  to  these  islands, 
no  doubt  rents  would  have  risen  according  to  Ricardo's 
thesis,  and  risen  to  an  intolerable  extent :  but,  as 
things  turned  out,  the  cultivation  of  richer  lands  (rent 
free  or  almost  rent  free)  in  America  and  elsewhere  has 
had  the  precisely  opposite  effect.  The  competition 
of  corn  imported  from  abroad  has  not  advanced  rents 
in  England,  but  kept  them  down.  It  has  scarcely  paid 
to  grow  corn  in  many  counties  where  formerly  it  was 
a  profitable  business.  In  other  words,  Ricardo's  theory 
is  about  as  applicable  to  present-day  conditions  as  the 
Law  of  Moses  would  be  applicable  to  the  city  of  New 
York.  The  reforms,  therefore,  which  rest  upon  Ricardo's 
hypothesis,  are  purely  chimerical.  They  simply  would 
not  help  us  in  the  least  to  solve  the  problems  of  to-day. 


Chapter  X. 
THE  POWER  OF  CAPITAL. 

It  once  befel  that  in  a  certain  village  (not  far  remote, 

perhaps,  from  the  neighbourhood  of  Nowhere)   there 

arose  the  very  trouble  which    our  Socialist  imagined. 

A  rapacious  fellow — no  matter  by  what  means — had 

come  into  possession  of  the  village  spring,  and  lived 

by  levying  an  extortionate  tax  upon  the  water  supply 

of   the    inhabitants.     At    length    the    Parish    Council 

determined  that  this  tyranny  should  be  endured  no 

longer,    and   agreed   amongst   themselves    to  make   a 

practical     experiment     in     Socialistic     legislation.     A 

resolution    was    unanimously    passed,     annulling    all 

private  claims  over  the  natural  sources  of  the  supply  of 

water  ;    and  thereby  the  well — for  there  was  but  one — 

became  Parish  property  for  ever.     By  a  stroke  of  the 

pen  every  parishioner  was  made  free  in  future  to  get  his 

drink  for  nothing.     Amid  general  congratulations  the 

chairman   rose   to   suggest   that    a   draught   of   water 

should  then   and  there    be  fetched  and  drunk  by  all 

present     in    token    of    their    new-won    liberties.     The 

proposal  was  enthusiastically  received,  biat  scarcely  had 

the  village  beadle  been  despatched  to  the  well,  when  a 

fresh  predicament  was  disclosed.     The  well  was  deep — 

without  the  use  of  the  rope  and  windlass  which  the 

ex-proprietor  had  installed  with  his  own  hands,   the 

bucket  could  not  be  lowered,  much  less  raised,  and  the 

sly  scoundrel  lost  no  time  in  informing  them  that  the 

use  of  these  properties  was  only  to  be  had  upon  the 

same   conditions   as   before.     Now   the   terms   of   the 


THE  POWER  OF  CAPITAL  103 

resolution  made  reference  only  to  the  natural  sources 
of  supply,  but  did  not  cover  the  removal  of  any  man's 
property  against  his  will,  nor  the  confiscation  of  what 
his  personal  labour  had  produced.  Argue  as  they 
might — and  argue  they  did  in  long  and  numerous 
debates — no  agreement  could  be  reached  upon  the 
propriety  of  such  a  course.  In  the  meantime  the  owner 
remained  master  of  the  situation  ;  the  villagers  could 
not  live  without  their  water,  nor  draw  their  water 
without  the  windlass  and  the  rope  ;  there  was  there- 
fore no  alternative  but  to  pay  the  tax ;  and  the 
owner's  monopoly  has  continued  unimpaired  until 
this  day.  Now  the  moral  of  the  tale  is  this  ;  that  the 
means  of  production  and  the  sources  of  production 
are  often  so  mutually  dependent  that  a  monopoly  in 
one  may  often  be  as  powerful  an  instrument  of  extortion 
as  a  monopoly  in  the  other.  The  Socialist  may  confiscate 
the  land  or  deprive  the  landowner  of  his  rents,  but  such 
half  measures  will  never  bring  him  to  his  goal.  The 
Capitalist,  a  yet  more  formidable  adversary,  still 
stands  astride  the  path. 

It  has  never  been  easy  to  estimate  in  their  true 
relative  proportions  what  part  is  played  by  nature 
and  what  by  man  in  the  process  of  production,  to 
distinguish  between  the  value  of  the  well-head  and  the 
value  of  the  well,  or  between  the  machinery  at  the  pit- 
mouth  and  the  mineral  deposits  in  the  soil.  Even 
in  cases  where  the  means  and  the  sources  of  production 
are  less  closely  interlinked,  no  very  clear  distinction 
can  be  drawn.  But  this  much  at  least  may  be  said, 
that,  as  industry  has  developed,  the  importance  of  the 
means  has  steadily  increased,  until  in  our  own  day 
Capital  has  assumed  a  predominant  position  in  the 
partnership.  In  olden  times,  before  machinery  had 
been  invented,  the  implements  of  agriculture  and 
manufacture  were  relatively  of  less  importance.  Next 
to  the  material  sources  of  supply  it  was  then  man's 


104  NEW  FALLACIES  OF  MIDAS 

labour  and  man's  skill  that  counted  most.      Given  a 
field  ;    any  smith  could  make  and  any  labourer  drive 
the   plough   that   should  till  it;  given   a  forest,   any 
woodsman  could  fell  the  trees,  and  any  joiner  turn  them 
into  houses,  furniture  or  carts  ;   so  the  two  most  power- 
ful elements  in  mediaeval  society  were  the  landowner 
and  the  Craftsman's  Guild.     To-day,   however,   it  is 
different  ;      modern    production     depends    upon     an 
elaborate  paraphernalia  of  powerful  engines  and  delicate 
machinery.     Without  these,  not  only  would  most  of 
our  production  be  impossible,  but  the  raw  material 
would  often  be  nothing  better  than  worthless  refuse. 
Were  it  not  for  the  intricate  processes  by  which  valuable 
by-products  are  extracted  from  a  slag-heap,  it  would 
simply  cumber  the  ground.     Modern  science  has  even 
turned  the  atmosphere  to  serviceable  uses  ;    and  by  a 
recent  German  invention  nitrates  are  evolved  out  of  the 
empty  air.     In  this  case,  as  in  many  other  instances, 
the  whole  value  seems  to  centre  upon  the  mechanism 
or  production  ;    and  even  of  industry  in  general  the 
same  principle  holds  true  in   a  greater  or  less  degree. 
The  man  at  the  Lancashire  power  loom  is  more  im- 
portant than  the  nigger  with  a  hoe  ;    and  the  profit 
to  be  made  in  turning  out  the  finished  article  is  out 
of  all  proportion  superior  to  the  profit  of  raising  the 
raw  material.     A  very  little  knowledge  of  the  world 
will  show  that  it  pays  better  to    be  a    manufacturer 
than  a  farmer. 

In  short,  the  supremacy  of  the  Capitalist  in  the 
modern  world  is  not  to  be  disputed.  His  power  is 
probably  far  greater  than  was  ever  the  power  of  feudal 
landowners ;  his  influence  extends  more  widely, 
employing  the  labour  and  controlling  the  destiny  of 
multitudes  ;  his  authority  strikes  no  less  deep  into 
the  social  and  political  life  of  countries,  bending  even 
eniperors  or  governments  to  his  will.  Yet,  for  all 
this,  it  can  hardly  be  asserted  that  his  power  is  based 


THE  POWER  OF  CAPITAL  105 

upon  monopoly.  Capital  is  not  of  its  own  nature  an 
obstacle  to  competition.  For,  in  the  first  place,  it  is 
not  like  land  limited  in  dimension.  No  amount  of 
thought  or  trouble  can  add  new  acres  to  the  earth's 
natural  surface  ;  but  you  may  build  factories,  and 
laboratories,  railroads  or  smelting  works,  so  long  as 
there  is  room  to  build  or  a  need  to  satisfy.  Any  man 
who  has  saved  himself  or  can  borrow  other's  savings, 
can  make  a  fresh  addition  to  the  world's  capital ;  and 
though  here  and  there  some  novel  invention  or  other 
unique  advantage  may  put  a  temporary  monopoly 
in  the  hands  of  some  fortunate  capitalist,  yet  where 
he  can  lead,  somebody  else  can  follow  ;  the  rights  of 
patents  are  not  so  rigid  or  exclusive  but  that  others 
can  profit  by  a  new  idea,  and  in  the  long  run  com- 
petitors will  not  be  wanting.  In  the  second  place, 
capital  is  far  more  widely  distributed  than  land.  Any 
man  who  has  saved  even  a  few  pounds  to  invest  in 
railways,  oilwells,  motor  works  or  what  not,  can  have 
^his  share  in  capital.  In  virtue  of  that  share  he  can 
claim  that  somewhere  there  exists  a  yard  of  railway 
track  which  belongs  to  him  ;  or  an  engine  crank  that 
his  savings  have  helped  to  create  ;  and  there  would  be  a 
sort  of  truth  in  his  jesting  boast.  To  the  length  of  his 
few  pounds  he,  too,  is  a  capitalist.  But,  although 
capital  is  more  easily  acquired  and  possesses  greater 
elasticity  than  land,  it  is  in  these  very  qualities  that 
lies  the  secret  of  its  peculiar  power.  Capital  may  be 
not  productive  merely  ;  but  self-productive.  It 
resembles  that  tropical  tree  whose  roots  send  forth  fresh 
suckers  from  which  new  trees  spring  up.  In  like 
manner  the  capitalist  can  utilise  his  profits  for  the 
erection  of  new  factories,  the  employment  of  more 
hands,  or  the  improvement  of  his  plant  ;  and  thus 
in  a  hundred  ways  secure  fresh  capital  and  fresh 
profits — to  be  used  in  turn  for  the  same  purpose  as 
before.     In  this  fashion,  large  businesses  have  sprung 


io6  NEW  FALLACIES  OF  MIDAS 

from  small  beginnings,  and  men  who  have  started  life 
with  the  proverbial  sixpence  in  their  pockets,  have 
become  the  kings  of  industry  and  commerce. 
Millionaires  and  even  multi-millionaires  are  now 
no  rare  phenomenon,  and  wealth  accumulates  and 
grows  in  the  hands  of  such  individuals  until  imagin- 
ation can  no  longer  grasp  the  magnitude  of  their 
resources  ;  and  all  the  while  fresh  profits  are  rolling 
in  upon  them  (far  more  than  any  man  could  spend 
upon  himself)  and  are  in  their  turn  sent  back  to  swell 
the  central  stream.  Unto  him  that  hath  shall  be 
given,  is  the  inevitable  law  of  high  finance. 

But  the  Bible  text  does  not  end  there  ;  and  un- 
happily its  conclusion  has  also  its  economic  counterpart. 
The  great  industrial  change  which  brought  so  rich 
an  opportunity  of  profit  for  those  who  possessed  a 
share  in  capital,  was  the  beginning  of  a  very  disastrous 
era  for  those  who  possessed  none.  It  was  after  all  an 
insignificant  fraction  of  the  whole  people  that  shared 
those  opportunities.  The  millions  of  workers  whose 
wages  were  seldom  sufficient  and  never  more  than 
sufficient  to  keep  them  clothed  and  housed  and  fed, 
were  not  able  to  save.  If  from  week  to  week  a  few 
pennies  were  put  by,  the  hoard  was  kept  against  the 
accidents  of  sickness  or  the  coming  of  old  age  ;  they 
had  not  the  power,  or  if  the  power,  then  not  the  habit 
to  invest.  Beyond  a  few  sticks  of  furniture,  a  little 
crockery,  perhaps  a  tool  or  two,  the  poor  possessed  no 
property  of  their  own  ;  and  in  the  vast  apparatus  of 
mechanical  production,  the  powerful  instrument  of 
loom  and  forge,  printing  press  and  lathe,  they  had  no 
share  at  all.  Their  only  capital  (if  we  may  call  it  so) 
was  strength  of  muscle  and  skill  of  hand  ;  and  with 
these  feeble  resources  they  were  compelled  to  pit 
themselves  in  an  unequal  conflict  against  the  Capitalist 
Colossus.  For  conflict  it  certainly  was  ;  and  unequal 
(under  such  conditions)   it  must  be,  as  surely  as  the 


THE  POWER  OF  CAPITAL  107 

bargain  between  a  man  with  a  loaf  and  a  starving 
beggar  must  be  unequal.  For,  though  a  bargain  is  a 
voluntary  exchange  between  two  parties,  it  does  not 
necessarily  follow,  that  the  bargain  will  be  fair  or  that 
the  two  parties  will  compete  upon  an  equal  footing. 
It  may  well  be  that  one  will  hold  the  other  at  a  dis- 
advantage ;  his  bargaining  power,  as  we  say,  will  be 
the  stronger  of  the  two,  and,  like  the  commander  of  the 
victorious  army,  he  can  dictate  the  terms.  Yet,  to  say 
this  is  nothing  more  than  to  restate  in  different  words 
the  old  formula  of  supply  and  demand  ;  and  it  is  by 
the  light  of  that  formula  perhaps  that  we  can  best 
understand  the  relations  of  capital  and  labour  and 
estimate  the  bargaining  power  of  each. 

First  then  as  concerns  demand.  It  is  clear  that 
each  wants  what  the  other  has  to  give  ;  Capital  wants 
work,  and  Labour  wages  ;  but  their  wants,  though 
mutual,  are  very  different  in  degree.  The  employer, 
it  is  true,  depends  for  his  success  upon  the  services  of 
labour  ;  he  may  be  ruined  in  his  business,  if  labour 
fails  him  ;  but,  even  in  that  case,  all  his  eggs  are 
seldom  in  one  basket  ;  he  will  have  some  reserve  of 
funds  ;  most  certainly  he  need  not  starve,  perhaps 
not  even  put  down  his  horses  or  dismiss  his  butler. 
For  the  worker  it  is  far  otherwise.  His  weekly  earnings 
are  sufficient  only  for  the  week  ;  he  has  no  reserve  or 
next  to  none  ;  and  if  a  few  shillings  lie  between  him 
and  starvation,  that  is  all.  For  him,  living  thus  upon 
the  edge  of  absolute  disaster,  the  first  necessity  is  to 
find  employment.  Upon  what  terms  he  can  hardly 
stop  to  ask.  If  is  not  for  him  to  haggle  ;  for  upon  a 
trial  of  strength  he  must  inevitably  prove  the  weaker 
man  ;  and  before  the  employer  has  seriously  con- 
sidered some  readjustment  of  the  household,  he  and  his 
family  will  have  starved.  The  balance  in  the  bargain 
is  against  him. 

Nor,  if  we  turn  to  the  question  of  supply,  is    the 


io8  NEW  FALLACIES  OF  MIDAS 

worker's  case  much  better.  He  needs  a  job  ;  but  that 
there  are  seldom  jobs  for  all,  requires  no  proof.  Un- 
employment is  only  too  common  and  too  obvious  a 
circumstance.  Trade  fluctuates  ;  a  slump  follows  on 
a  boom  and  mills  and  factories  are  shut  down  or  the 
number  of  hands  reduced.  Many  industries  offer  no 
more  than  temporary  employment,  and  in  the  off 
seasons  many  an  able-bodied  man  will  be  thrown  out  of 
work  and  tramp  the  streets  in  search  of  some  casual 
employment.  And  the  natural  corollary  of  all  this  it 
is  not  difficult  to  see.  The  employer  for  his  part  finds 
no  difficulty  of  supply.  With  this  floating  reserve  of 
unemployed  and  casual  labourers  to  draw  on  he  can 
get  all  the  labour  he  requires.  The  more  numerous 
the  applicants  and  the  keener  the  competition  for  the 
post,  the  closer  will  be  the  bargain  he  can  drive  and  the 
lower  the  wages  he  need  pay.  Only  at  rare  intervals 
does  an  actual  scarcity  of  labour  turn  the  balance 
decisively  against  him.  Such  was  the  scarcity  that 
followed  the  Black  Death,  and  first  broke  down  the 
tyranny  of  .feudal  customs  ;  the  plague  by  killing  off 
large  numbers  of  the  peasants,  enhanced  the  value  of 
the  survivors'  labour  and  gave  them  the  opportunity 
to  turn  upon  their  masters.  Such  again  has  been  the 
scarcity  which  in  our  own  time  was  caused  by  drafting 
of  the  able-bodied  into  armies  and  which  raised  the 
scale  of  wages  to  an  unprecedented  level.  But  these  are 
exceptions  to  the  general  rule  ;  normally  the  supply  of 
labour  is  in  excess  of  the  employer's  demand,  and 
never  more  so  than  in  the  first  half  of  the  last  century, 
when  the  impetus  of  the  Industrial  Revolution  was  first 
gathering  strength,  and  when  the  relations  of  capital 
and  labour,  as  we  know  them,  first  took  shape. 

(IL) 

Since  the  early  days  of  capitalist  supremacy  much 
has   happened   to   alter  the  course   of   the   economic 


THE  POWER  OF  CAPITAL  109 

struggle.  The  social  conscience  of  the  nation  has 
awakened  ;  Labour  has  begun  to  organise  and  Govern- 
ment to  interfere  ;  and  the  picture  which  we  have 
drawn  of  the  capitalist's  power  and  the  labourer's 
necessity,  though  true  of  many,  is  by  no  means  true  of 
all  classes  of  industry  to-day.  But  as  a  picture  of  the 
early  stages  of  the  industrial  revolution  it  is  certainly 
not  overdrawn.  Indeed  the  shadows  are  hardly  to  be 
painted  dark  enough  ;  it  is  almost  impossible  to 
exaggerate  the  misery  and  horror  of  those  years.  It 
is  one  of  the  most  bitter  ironies  of  fate  that  the  very 
change  which  by  increasing  the  facilities  for  plentiful 
and  cheap  production  ought  to  have  brought  an  imme- 
diate improvement  in  the  condition  of  the  poor,  had 
at  first  an  almost  directly  opposite  effect.*  For  one 
thing  the  new  mechanical  appliances  which  very  soon 
ousted  the  old-fashioned  methods  of  hand  labour, 
required  fewer  men  to  work  them.  A  reaping  machine 
will  take  the  place  of  a  dozen  mowers  ;  and  one  or 
two  tenders  of  a  power  loom  could  do  the  work  of 
perhaps  fifty  weavers  ;  thus  many  handicraftsmen 
found  themselves  thrown  out  of  employment ;  and  we 
cannot  wonder  that  they  bitterly  resented  the  intro- 
duction of  these  new  machines  which  robbed  them  of 
their  livelihood,  or  that  their  protests  often  took  the 
most  violent  and  most  lawless  form.  Then  again,  it 
was  soon  discovered  by  employers  that  in  the  new 
processes  of  industry  there  was  ample  scope  for  using 
female  and  child  labour.  Women  were  set  to  work  in 
factories  by  night  as  well  as  day  ;  children,  ten,  eight 
and  six  years  old,  were  employed  in  coal  mines  dragging 
preposterous  weights  through  the  damp,  unwhole- 
some   galleries.     Manufacturers  even    procured    girls 

♦  It  must  not  be  assumed,  however,  as  it  too  often  is,  that  the  lot 
of  the  labourer  before  the  Industrial  Revolution  was  a  bed  of  roses. 
Poverty  and  distress  were  perhaps  just  as  common,  but  the  conditions 
of  the  towns  seems  to  accentuate  the  hardships  of  the  poor — partly  by 
contrast  with  the  more  obvious  luxury  of  the  rich. 


no  NEW  FALLACIES  OF  MIDAS 

and  boys  from  workhouses  and  foundling  hospitals  ; 
and  subjected  them  to  a  lifelong  drudgery  little  better 
than  the  bondage  of  a  slave.  Meanwhile  thousands  had 
left  their  country  homes  and  migrated  to  the  new 
industrial  centres,  urged  thither  by  the  loss  of  their  old 
livelihood  or  enticed  by  the  hope  of  a  better.  So  the 
population  of  the  towns  steadily  increased  ;  and  the 
families,  herded  together  in  conditions  of  appalling 
squalor,  grew  and  multiplied  prodigiously  ;  for  the 
poorest  and  most  miserable  classes,  among  whom 
parents  are  over-eager  to  reap  the  advantage  of  their 
children's  labour,  are  naturally  the  most  prolific. 
With  food  at  high  and  (until  the  repeal  of  the  Corn 
Law)  at  intolerable  price,  wages  were  quite  inadequate 
for  decent  comfort  or  nutrition.  For  the  weaker  and 
less  skilful  life  became  a  veritable  struggle  to  survive. 
From  all  the  various  causes  which  we  have  just 
described,  the  supply  of  labour  now  far  exceeded  the 
natural  demand,  and  the  result  was  the  most  bitter 
competition  for  employment.  Moreover,  the  oppor- 
tunities of  finding  it  were  strictly  limited.  If  it  was 
not  to  be  found  upon  the  spot,  there  was  little  chance 
of  gaining  information  about  other  towns,  and,  if 
information  were  forthcoming  there  were  few  facilities 
for  travelling  thither.  Railways  were  neither  cheap 
nor  numerous  ;  and  labour  bureaux  were  not  invented. 
So  in  the  matter  of  labour  employers  had  no  special 
fear  of  distant  rivals  ;  they  exercised  a  local  monopoly, 
and  provided  that  the  wage  they  offered  was  enough  for 
bare  subsistence,  they  were  sure  to  find  applicants  in 
plenty.  Nor  did  they  scruple  to  take  advantage  of 
their  power  ;  and  as  their  wealth  multiplied,  their 
position  became  more  and  more  secure.  They  could 
face  the  feeble  opposition  of  the  masses — Chartists 
strikers  and  even  rioters — with  the  confident  assurance 
of  the  stronger  party.  To  the  ominous  signs  of  a  still 
deeper  and  more  lasting  discontent  they  hardly  gave 


THE  POWER  OF  CAPITAL  iii 

a  thought — until  little  by  little  there  came  over  England 
that  fatal  cleavage  of  the  classes  which  was  the  begin- 
ning of  industrial  war. 

This    absence    of    sympathy    between    Capital  and 
Labour  was  in  part  at  least  the  inevitable  consequence 
of  the  industrial  innovations.     In   the   old-fashioned 
craft  workshop  master  and  apprentices,  employer  and 
employed,  had  lived  and  worked  together  side  by  side  ; 
and  such  daily  intercourse  had  bred  between  them  a 
mutual   loyalty    and   goodwill.     But   the   head    of   a 
factory   employing  perhaps  a   thousand  hands  could 
hardly  keep  in  touch  with  individuals.     The  bond  of 
sympathy  was  broken  ;    and,  just  when  it  was  most 
needed,  the  employer  ceased  to  feel  a  sense  of  personal 
responsibility  towards  the  men  and  women  he  employed. 
As  was    natural,  the  softer  feelings  of  generosity  and 
pity  were  slowly  blunted,  and  even  the  most  respectable 
and  virtuous  employers  were  indifferent  to  the  sufferings 
which  often  unwittingly  they  were  inflicting  on  their 
fellow-beings.     But  as  though  half  conscious  that  some 
justification  was  required  for  such  rigorous  and   even 
inhumane  conduct  of  their  business,  they  sought  to 
reinforce  their  shaken  assurance  of  moral  rectitude  by 
an   appeal   to   economic   wisdom.     They   were   them- 
selves the  disciples  and  in  some  sense  the  product  of 
that  school  of  thought  which  began  with  Adam  Smith 
and  was  carried  on  by  John  Stuart  Mill.     From  these 
teachers  they  had  imbibed  the  doctrine  which  was  the 
basis  of  their  business  creed,  that  it  was  the  economic 
duty  of  every  individual  to  put  his  own  interest  first  and 
others'   interests  nowhere,  driving  the  closest  bargain 
possible,  buying  in  the  cheapest  market,  selling  in  the 
dearest,   and  applying   the  principles  of   supply    and 
demand     without    scruple    or    restraint.     Unfettered 
and  even  ruthless  competition  was  to  them  the  very 
soul  of  commerce,  and  to  do  them  justice  they  were 
sufficiently   consistent   to   maintain   their   creed   even 


112  NEW  FALLACIES  OF  MIDAS 

when  it  might  tell  against  them.  They  would  uphold 
the  principle  of  Free  Trade  and  the  Open  Door, 
although  the  importation  of  cheap  foreign  goods  might 
prejudice  their  own  sales  in  English  markets  ;  and  they 
met  competitors  at  home  with  the  sam^e  bold  spirit  of 
defiance.  They  asked  no  quarter  and  gave  none  ; 
so  it  seemed  only  fair  and  natural  that  in  their  attitude 
towards  labour  they  should  pursue  their  settled 
policy.  Between  labourer  and  capitalist,  it  was  each 
for  himself,  a  fight  to  the  finish  in  a  fair  field  and  no 
favour  ;  and  if  the  labourer  should  make  but  a  poor 
fight  of  it,  so  much  the  worse  for  him.  And,  when 
doubts  arose,  as  they  were  bound  to  do,  concerning 
the  justice  and  morality  of  such  a  course,  the  sponsors 
of  this  gospel  of  selfish  individualism  were  prepared 
with  their  defence.  The  defence  which  they  advanced 
was  as  paradoxical  as  it  was  ingenious  ;  for  it  claimed 
that  the  very  keenness  of  the  struggle  was  in  reality 
for  the  worker's  own  advantage.  The  interest  of  the 
whole  community,  it  was  said,  would  best  be  served 
when  every  individual  pursued  his  own  interest  to  the 
uttermost  of  his  power.  The  prosperity  of  all  could 
only  proceed  from  the  prosperity  of  each  ;  let  each 
therefore  strive  to  develop  as  best  he  could  the  means 
and  resources  which  lay  at  his  disposal,  and  it  would 
inevitably  follow  that  production  would  be  multiplied, 
the  volume  of  trade  increase,  and  the  richest  possible 
harvest  would  eventually  be  reaped  by  the  community 
at  large.  In  such  a  consummation  even  the  poorest 
workman  would  have  an  ample  share ;  everything 
would  be  plentiful,  every  price  cheap  and  everybody 
prosperous. 

To  this  philosophy  no  reasoned  opposition  was 
offered  and  hardly  a  voice  (for  a  while  at  least)  was 
raised  against  it.  Its  supporters,  who,  because  they 
were  chiefly  to  be  found  in  the  big  industrial  and 
commercial  centres  of  the  north,  came  to  be  known  as 


THE  POWER  OF  CAPITAL  113 

the  Manchester  School,  saw  no  reason  to  go  back  upon 
their  logic.  Wrapt  in  the  security  of  their  comfortable 
creed,  they  continued  to  pile  fortune  upon  fortune  ; 
for  the  miserable  condition  of  the  masses  upon  whose 
labour  and  poverty  these  fortunes  were  in  a  large 
measure  built,  they  felt  no  doubt  an  honest  regret  and 
pity.  In  private  perhaps  they  would  indulge  this 
secret  weakness,  doing  a  kind  turn  to  an  employee 
in  distress  and  permitting  their  wives  to  make  charit- 
able doles  of  soup  or  blankets.  But  in  the  counting- 
house  or  at  the  works  they  suppressed  these  softer 
feelings,  conscientiously  tenacious  of  their  creed. 
And  if  its  present  application  bore  hardly  upon  others, 
what  could  they  do  but  shrug  their  shoulders  and 
pursue  their  course  to  its  appointed  end  ?  Let  their 
philosophy  but  be  given  a  fair  trial,  and  all  would 
yet  work  out  for  the  best. 

When  the  fathers  have  eaten  sour  grapes  the 
children's  teeth  are  set  on  edge,  and  there  is  much  for 
which  the  Victorians  must  be  answerable  in  the  in- 
dustrial troubles  of  to-day.  Yet  easy  and  natural  as 
it  is  for  us  to  condemn  the  sins  for  which  we  s-uffer,  we 
should  be  doiug  less  than  justice  to  the  Victorians  if  we 
did  not  ackncwledge  the  one  great  debt  we  owe  them. 
Coming  at  a  time  when  the  paramount  necessity  was 
to  increase  production,  it  is  undeniable  that  they 
performed  their  task.  They  built  up  the  capital 
resources  of  which  we  are  reaping  the  benefit  to-day, 
and  their  only  crime  was  that  they  so  exaggerated 
the  importance  of  this  economic  function  as  to  be 
blind  to  other  issues  which  were  important  too.  In 
short,  as  is  the  common  failing  with  authors  of  great 
changes,  the  leaders  of  the  Industrial  Revolution 
overdid  their  part.  The  idea  which  underlay  their 
policy  was  sound  enough,  but  like  most  ideas,  it 
became  intolerable  when  pressed  to  its  logical  con- 
clusion.    As  a  reaction  from  the  hampering  restrictions 


114  NEW  FALLACIES  OF  MIDAS 

of  the  previous  economic  era,  their  programme  of 
Free  Trade  and  Open  Competition  was  an  undeniable 
advance  ;  and  it  is  to  their  lasting  credit  that  they 
founded  a  school  of  thought  which  was  then,  as  it  is 
now,  the  mainspring  of  progressive  Liberalism.  In  so 
far  as  their  policy  inflicted  grievous  harm  on  others, 
they  were  perhaps  as  much  the  victims  of  circumstance 
as  the  conscious  or  willing  authors  of  distress.  The 
individual,  let  us  remember,  is  nearly  always  the 
creature  of  his  environment  ;  he  cannot  easily  resist 
the  overwhelming  pressure  of  events,  or  rebel  against 
the  standard  of  the  society  in  which  he  lives.  So, 
before  we  pass  judgment  upon  the  Victorian  manu- 
facturer, we  should  in  very  justice  take  account  of 
the  difficulties  in  which  he  stood.  He  was  himself 
faced  with  the  keenest  competition  of  energetic  rivals  ; 
and  if  the  wages  that  he  paid  were  low  (though  in 
point  of  fact  they  were  not  so  low  as  the  wage  of  the 
agricultural  labourer)  it  was  the  market  and  not  he 
that  fixed  the  standard.  The  very  urgency  of  men's 
needs  was  with  him  an  argument  for  offering  a  low 
wage  ;  for  it  seemed  inevitable,  and  in  a  certain  sense  it 
was  inevitable,  that  the  most  urgent  need  should  be 
satisfied  before  the  need  which  was  less  urgent ;  and 
the  only  way  to  discover  where  the  pinch  was  most 
severely  felt,  was  to  offer  employment  to  the  lowest 
bidder.  Such  reasoning  did  not  appear  to  the  Vic- 
torians as  contrary  to  justice  or  humanity  ;  and  even 
if  it  had  appeared  so,  they  could  hardly  have  helped 
themselves.  For  us,  looking  back  from  a  more  secure 
and  prosperous  era  upon  the  bitter  struggle  of  those 
times,  it  is  easy  to  correct  the  fallacies  into  which  they 
fell.  For  now  the  pendulum  has  swung  once  more  ;  a 
new  reaction  has  set  in  ;  and  where  they  rightly  saw 
the  necessity  for  individual  freedom,  we  now  see  the 
danger  of  too  much  freedom  and  the  necessity"  of 
curtailing  it.     And  so  for  us  unlimited  competition  is 


THE  POWER  OF  CAPITAL  115 

suspect.  Individualism  stands  at  a  discount,  and 
Socialism  and  Co-operation  are  the  favourite  catch- 
words of  the  day.  Each  generation  is  to  be  judged 
according  to  its  lights  ;  and  if  the  worst  fault  of  the 
Victorians  was  that  they  carried  their  principles  too 
far,  it  is  for  us  to  profit  by  their  example  ;  and  while 
we  endeavour  to  correct  the  results  of  their  exaggerated 
creed,  let  us  beware  lest  we  fall  under  the  same  con- 
demnation and  mar  even  beneficent  reforms  by  a  lack 
of  patience  or  an  excess  of  zeal. 


Chapter  XI. 
THE  PROTEST  OF  RUSKIN. 

(i-) 
In  the  ferment  of  revolutions  (whether  of  trade  or  of 
politics)  half  a  truth  is  a  better  guide  than  no  truth  at 
all ;  and  the  Manchester  doctrine,  crude  and  per- 
verted as  it  was  in  some  directions,  contained  enough 
economic  wisdom  to  produce  good  results  as  well  as 
evil.  The  crowning  triumph  of  its  political  supporters 
who  succeeded  through  the  repeal  of  the  Corn  Law  in 
1846  in  wresting  an  unfair  privilege  from  a  landed 
aristocracy  and  in  opening  the  door  to  the  free  im- 
portation of  cheap  grains  from  foreign  countries,  did 
more  to  alleviate  popular  distress  than  any  amount  of 
sentiment  or  charity  could  have  done.  The  effect  of 
this  reform  was  almost  instantaneous  ;  and  during 
the  third  quarter  of  the  century  there  was  a  steady 
improvement  in  the  condition  of  the  woirking  classes, 
who  were  now  able  to  secure  at  least  the  necessities  of 
life  at  moderate  prices.  At  the  same  time  the  benefits 
of  increased  production  were  beginning  to  make  them- 
selves felt.  The  enterprise  of  the  capitalists  who  had 
succeeded  during  the  forties  in  laying  down  railroads 
over  thousands  of  miles  of  country  and  in  every  part  of 
England,  gave  a  fresh  impetus  to  trade  and  led  to  a 
period  of  unprecedented  prosperity  in  which  every 
class  could  claim  some  share.  During  these  years  it  is 
not  much  to  say  that  a  third  of  the  population  were 
raised  above  the  limit  of  abject  poverty.  The  tide 
was  turning  at  last ;    and  one  index  (though  an  un- 

116 


THE  PROTEST  OF  RUSKIN  117 

wholesome  index)  of  the  change  is  to  be  found  in  the 
portentous   growth    of    the    national    expenditure    on 
drink,  a  growth  which  continued  unabated  until    the 
lean  years  of  trade  depression  in  the  seventies.     In 
industry  too  the  worst  abuses  were  gradually  suppressed. 
The  philanthropic  zeal  of  Lord  Shaftesbury  and  others 
set  the  political  wheels  in  motion,  and  laws  were  passed 
curtailing  the  use  of  child  and  female  labour  in  pits  and 
factories.     Yet   to  whatever   causes   we   may   ascribe 
the  betterment   of   the  working   man's  position,   the 
capitalist  himself  deserved  no  special  thanks.     Though 
he   might   fairly   interpret   the   new   prosperity   as   a 
justification   of  his   own   theories,   yet   there   was   no 
recantation  of  his  main  hypothesis,  and  little  enough 
change  of  heart.     The  grinding  tyranny  of  merciless 
competition   still   held   the  field   unchallenged  ;     even 
earnest  men  like  Bright  and  Cobden  who  had  achieved 
the  deliverance  of  the  country  from  the  killing  burden 
of  the  Corn  Tax,  were  nevertheless  among  the  most 
stubborn   opponents    of   Lord   Shaftesbury's   reforms. 
In  a  large  number  of  industries  wages  were  still  main- 
tained at  a  starvation  level.     The  tale  is  told  how  in  the 
streets  of  Leicester,  the  Chartist,  Thomas  Cooper,  hearing 
the  stocking-makers  busy  at  their  work  far  into  the 
night,  and  enquiring  of  a  friend  what  wage  they  earned, 
was  told  that  the  wage  was  about  four  and  sixpence.* 
"  You  mean  four  and  six  a  day,"  said  Cooper,  in  all 
innocence.     "  No,  four  and  six  a  week,"  was  the  reply, 
and  this  for  working  sixteen  hours  out  of  the  twenty- 
four.     Such  a  state  of  things  was  not  to  be  remedied 
in  a  day,  and  meanwhile  it  was  regarded,  by  theorists 
and  society  alike,  as  the  outcome  of  an  economic  law 
which  with  the  best  will  in  the  world  neither  capitalist 
nor  labourer  was  able  to  alter  or  resist.     So  accepting 
poverty  and  distress  as  the  inevitable  accompaniment 

•  See  an   essay  in    Arnold   Toynbee's   "Industrial    Revolution" 
entitled  "  Industry  and  Democracy." 


ii8  NEW  FALLACIES  OF  MIDAS 

of  industrial  progress,  Mid- Victorian  England  refused 
to  vex  its  soul  over  such  matters  ;  and  relapsed  into 
a  self-satisfied  complacency  which  contrasts  strangely 
with  the  qualms  and  heart-searchings  of  our  twentieth 
century  days. 

Into  this  secure  world  of  comfortable  platitudes 
and  prosperous  energy,  there  was  launched  at  length  a 
challenge  which  startled  and  not  a  little  shocked  it. 
In  1869  John  Ruskin,  known  hitherto  as  a  brilliant 
but  somewhat  wayward  critic  of  painting  and  Italian 
architecture,  wrote  for  the  Cornhill  Magazine  a  series 
of  four  essays,  which  eighteen  months  later  were 
published  in  a  book  entitled,  "  Unto  This  Last."  In 
these  essays  Ruskin  denounced  in  no  veiled  terms  the 
utter  rottenness  of  the  industrial  conditions  then 
prevailing.  His  was  not  perhaps  the  first  protest  that 
was  made  ;  Carlyle  had  inveighed  against  an  avaricious 
age  with  all  the  passion  of  his  racy  rhetoric.  Dickens 
in  "  Hard  Times,"  and  other  novels,  had  revealed 
something  of  the  miseries  of  the  poor.  But  to  challenge 
the  authenticity  of  the  Manchester  gospel,  to  call  in 
question  the  truth  of  its  fundamental  hypothesis,  this 
had  hardly  been  attempted  till  Ruskin  dared  it  in  this 
wonderful  book  ;  wonderful  alike  in  the  audacity  of 
its  enthusiasm,  which  defied  all  the  most  cherished 
convictions  of  his  day,  and  in  its  prophetic  vision  which 
outran  time  and  with  the  insight  of  true  genius  seems 
to  have  foreshadowed  future  changes  and  heralded  in 
advance  the  deep  movings  of  a  national  conscience, 
tardily,  but  in  our  own  days  at  least,  unmistakably 
awakening  ;  a  wonderful  book,  too,  it  must  be  owned, 
in  its  reckless  disregard  of  self-consistency  and  its 
defiance  of  the  hard  logic  of  fact.  There  is  no  mis- 
taking Ruskin' s  message,  however  ;  it  was  delivered 
with  a  lucidity  born  of  passionate  conviction  ;  with  an 
eloquence  enriched  by  a  wealth  of  metaphoric  imagery 
and  biblical  quotation,  and  with  all  the  musical  art  of 


THE  PROTEST  OF  RUSKIN  119 

that  poetic,  prose  of  which  he  was  so  supreme  a  master, 
and  the  very  beauty  of  which  (as  Ruskin  himself 
complained)  often  diverted  men's  attention  from  the 
meaning  of  his  message.  As  a  treatise,  it  is  true,  it 
possessed  neither  reasoned  form  nor  scientific  com- 
pleteness ;  but  to  his  own  generation  at  least  its 
contents  were  so  wholly  new  and  so  subversive  of 
accepted  canons,  that  it  is  well  worth  our  while  here  to 
recapitulate  his  principal  contentions. 

The  contemporary  science  of  Political  Economy 
was  built,  as  it  seemed  to  Ruskin' s  generous  mind, 
upon  a  fundamental  falsehood.  Like  a  science  of 
gymnastics  which  should  assume  that  men  had  no 
skeletons,  it  undertook  to  examine  the  dealings  of 
man  with  man,  and  it  left  out  his  soul.  At  least,  it 
allowed  for  one  side  of  it  only,  and  that  the  worst 
side.  Thanks  to  this  initial  error,  says  Ruskin,  the 
man  of  business  had  come  to  believe  that  it  was  his 
first  duty  to  eliminate  all  the  kindlier  instincts  and 
emotions  and  that  the  first  condition  of  success  was  to 
be  selfish.  Society  at  large  had  not  unnaturally 
taken  the  man  of  business  at  his  word  and  imagining 
him  at  best  to  be  a  pure  self-seeker,  had  come  to  rate 
the  commercial  profession  lower  in  its  esteem  than  the 
professions  of  the  soldier,  the  clergyman,  the  doctor 
and  the  lawyer.  Ruskin  pleaded  for  a  revision  of  this 
judgment  ;  he  maintained  that  commerce  was  not 
incompatible  with  Christian  morality.  The  employer's 
part  was  not  of  necessity  to  grind  the  faces  of  the  poor 
and  depress  wages  to  the  lowest  farthing.  For  him, 
too,  no  less  than  to  other  men,  there  was  a  call  to 
nobler  duties  and  loftier  ideals  than  the  interest  of 
self.  In  commerce,  too,  "  it  is  necessary  to  admit 
the  idea  of  occasional  voluntary  loss  ;  that  sixpences 
have  to  be  lost  as  well  as  lives,  under  a  sense  of  duty  ; 
that  the  market  may  have  its  martyrdoms  as  well  as 
the  pulpit ;    and  trade  its  heroisms  as  well  as  war." 


120  NEW  FALLACIES  OF  MIDAS 

It  was  the  precedent  set  by  the  "  more  honourable  " 
professions  of  the  soldier,  the  doctor  and  the  priest, 
that  furnished  Ruskin  with  his  main  constructive 
idea.  Taking  these  for  his  model,  he  elaborated  a  new 
principle  upon  which  wages  should  be  determined. 
It  is  not,  he  argues,  the  way  of  the  world  to  bargain 
or  haggle  over  a  subaltern's  pay  ;  "  sick,  we  do  not 
inquire  for  a  physician  who  takes  less  than  half  a 
guinea  ;  litigious,  we  never  think  of  reducing  six  and 
eight-pence  to  four  and  sixpence  ;  caught  in  a  shower, 
we  do  not  canvass  the  cabmen  to  find  one  who  values 
his  driving  at  less  than  sixpence  a  mile."  Like  every 
one  of  these,  the  labourer  in  factory  or  coal  pit  is  also 
worthy  of  his  turn  ;  his  labour  has  an  absolute  value  ; 
and  its  price  should  be  a  settled  and  recognised  price. 
That  price  should  not  be  affected  either  one  way  or  the 
other  by  the  influence  of  supply  and  demand.  What 
have  they  to  do  with  the  value  of  a  man's  honest 
labour  ?  "I  want  a  horseshoe  for  my  horse  ;  twenty 
smiths  or  twenty  thousand  smiths  may  be  ready  to 
forge  it  ;  their  number  does  not  in  one  atom's  weight 
affect  the  question  of  the  equitable  payment  of  the 
one  who  docs  forge  it."  A  service  done,  we  should 
reward  it,  whether  it  be  done  well  or  ill,  by  the  same 
fixed  and  level  wage.  For  "  a  man's  labour  for  a  day 
is  a  better  standard  of  value  than  a  measure  of  any 
produce." 

Ruskin  did  not  imagine,  however,  that  competition 
could  be  altogether  banished ;  it  will  remain,  but 
under  a  different  and  healthier  form.  By  our  present 
practice,  "  according  to  the  laws  of  demand  and  supply, 
when  two  men  are  ready  to  do  the  work  and  only  one 
man  wants  to  have  it  done,  the  two  men  underbid  each 
other  for  it  ;  and  the  one  who  gets  it  is  underpaid. 
But  when  two  men  want  the  work  done  and  there  is  only 
one  man  ready  to  do  it,  the  two  men  who  want  it  done 
overbid   each   other   and   the   workman   is   overpaid. 


THE  PROTEST  OF  RUSKIN  121 

But  this,  by  Ruskin's  method,  could  never  happen  ; 
for  the  wage  would  no  longer  vary.  Instead  of  this 
selfish  and  suicidal  competition  by  which  one  man  is 
forced  to  bid  against  his  fellow  we  shall  have  an 
honourable  and  salutary  emulation.  For  the  man 
who  does  the  work  well,  will  find  employment,  the 
man  who  does  it  ill,  will  not.  The  reward  of  the  good 
workman  will  no  longer  be  the  uncertain  chance  of 
driving  a  closer  bargain  than  his  fellow,  but  the  com- 
fortable assurance  of  a  settled  livelihood.  The  bad 
workman  for  his  part  will  sink  to  a  lower  grade  of 
employment.  He  will  not  work  for  the  original 
employer,  but  may  be,  for  his  more  successful  rival ; 
for  the  latter  (earning  now  a  just  and  ample  wage), 
will  have  the  wherewithal  to  satisfy  new  wants  and 
will  be  able  to  pay  the  inferior  workman  to  provide 
for  their  satisfaction.  So  it  comes  about  that  the  good 
money  paid  by  the  employer  to  the  first  workman 
passes  on  from  him  to  benefit  the  second  also  ;  and 
instead  of  two  men*  serving  one  employer  at  an  unjust 
price,  we  shall  now  have  one  man  serving  the  employer 
and  another  man  serving  the  employed — and  each 
at  a  price  which  is  just. 

Many  other- things  Ruskin  has  to  say  in  "  Unto  This 
Last,"  some  which  concern  Political  Economy  and 
others  which  do  not  ;  neither  need  occupy  us  here. 
His  essays,  as  he  himself  says  in  the  Preface,  "  were 
reprobated  in  the  most  violent  manner  by  most  of  the 
readers  they  met  with."  The  prophet  had  no  honour 
in  his  own  generation.  Nevertheless  his  teaching 
sowed  good  seed.  Its  moral  appeal  went  far  deeper 
than  its  logic.  And  when  all  its  exaggerations,  its 
contradictions  and  its  fantasticalities  are  discounted, 
there  remains  much  in  what  he  said,  which  has  left  an 

*  Two  men  serving  the  employer  because  (as  Ruskin  argues)  by  his 
under-paymcnt  of  workman  Number  One,  the  employer  will  have  saved 
enough  to  employ  workman  Number  Two  as  v/ell. 


122  NEW  FALLACIES  OF  MIDAS 

enduring  mark  on  the  ideals  and  policies  of  the  years 
which    have    followed. 

(ii.) 

The  heresy  of  yesterday  is  not  seldom  the  orthodoxy 
of  to-day  ;  and,  since  Ruskin  delivered  his  message  to 
deaf  and  stubborn  ears,  the  world  has  travelled  far 
along  the  path  he  showed  it.  Ideals  and  standards 
have  changed ;  the  old  indifference  has  vanished ; 
and  in  theory  at  least,  if  not  in  practice,  we  have  all 
some  sympathy  to  spare  for  the  grievance  of  the 
"  sweated  "  labourer,  some  pity  for  the  slum-dweller, 
and  the  unemployed,  and  the  "  submerged  tenth." 
Consistent  perhaps  we  cannot  alwa3^s  boast  to  be. 
To  purchase  shirts  or  candles  at  the  cheapest  possible 
price  is  thought  fair  game  enough  ;  but  to  deal  with 
other  men's  labour  in  the  same  fashion  seems  some- 
how different,  and,  though  we  are  too  prone  to  forget 
how  often  cheap  goods  mean  ill-paid  labour,  yet  in 
drawing  this  very  distinction  we  give  proof  how  far  our 
point  of  view  has  changed.  For  us  human  toil  (and 
the  welfare  of  lives  and  families  dependent  on  it)  is  not 
a  commodity  like  other  commodities  to  be  bandied  to 
and  fro  by  the  callous  hucksters  of  a  market.  The 
labourer,  it  is  now  remembered,  is  also  a  man,  and  not 
an  inanimate  piece  upon  the  economic  chess-board. 
Thus  far  at  least  Ruskin  has  won  us  to  his  way  of 
thinking,  yet  seeing  how  widely  different  is  the  England 
of  to-day  from  the  ideal  England  which  Ruskin  had  in 
view,  we  cannot  but  ask  ourselves  whether  or  no  his 
schemes  of  reform,  and  in  particular  his  scheme  of  the 
level  wage  would  be  practicable  or  beneficial. 

Now,  if  what  Ruskin  advocated  was  simply  a 
standardisation  of  wages,  it  may  be  said  at  once  that 
things  have  moved  already  some  way  in  that  direction. 
Through  the  efforts  of  Trade  Unions  up  and  down  the 
country,    some   sort   of   agreement   has   been   reached 


THE  PROTEST  OF  RUSKIN  123 

with  masters  ;  and  a  particular  price  has  been  assigned 
to  a  particular  piece  of  work.  The  turning  of  a  lathe, 
the  minding  of  a  loom,  the  sorting  out  of 'coal  lumps, 
and  even  the  laying  of  a  brick  have  each  their  settled 
price.  But  even  in  these  organised  trades  it  must  be 
admitted  that  there  is  still  a  wide  divergence  between 
district  and  district,  and  it  may  be  between  neighbour- 
ing workshops.  There  are  many  occupations,  how- 
ever, in  which  wages  are  not  so  regulated  ;  thus  before 
the  Agricultural  Legislation  of  1917,  the  weekly 
earnings  of  a  farm  labourer  in  different  parts  of  the 
country  varied  as  widely  as  from  twenty-two  shillings 
to  twelve  ;  and  it  is  the  same  with  hundreds  of  lesser 
jobs.  In  short,  it  is  one  of  the  chief  duties  of  Labour 
in  the  future  to  force  such  organised  arrangements 
upon  employers,  and  defeat  the  inevitable  tendency 
of  struggling  workmen  to  undersell  each  other. 

If,  however,  Ruskin  imagined  that  by  the  system 
of  the  level  wage  he  would  eliminate  the  inexorable 
influence  of  demand  and  supply,  he  was  very  much 
mistaken.  For  without  reference  to  these  it  is  im- 
possible to  set  a  value  upon  labour  at  all.  Time,  as 
he  himself  admits,  is  no  true  standard.  If  a  coal- 
heaver  works  twelve  hours  to  provide  a  Prime  Minister 
with  coal,  he  cannot  expect  twelve  hours  of  service  in 
return.  A  general's  time  is  more  precious  than  a 
private's  ;  and  ten  minutes  of  a  skilled  physician's 
thought  is  worth  an  apothecary's  fortnight.  So  Ruskin 
falls  back  in  due  course  upon  the  notion  that  skill  must 
be  the  basis  of  evaluation.  Yet  has  skill  a  value  on  its 
own  account,  or  is  it  not  of  value  just  in  so  far  as  it 
satisfies  the  needs  of  men  ?  A  person  may  possess 
great  skill  in  the  study  of  Hebrew  dialects  or  in  the 
making  of  periwigs  ;  but  if  nobody  shares  his  anti- 
quarian zeal,  or  wishes  to  wear  false  hair,  he  could  not 
make  a  penny  by  cither.  In  Ruskin's  time  there  still 
existed  men  and  women  who  were  experienced  in  the 


124  NEW  FALLACIES  OF  MIDAS 

use  of  the  hand-loom  ;  their  skill  was  undeniable,  but 
if  it  had  been  urged  that  they  should  continue  to  receive 
their  former  takings,  it  would  have  been  a  puzzle  where 
to  find  the  money.     Skill  even  of  the  highest  sort  must 
often   go  unrewarded,   and  the  greatest   epic  in  the 
English  language  brought  Milton  five  pounds  for  the 
first  edition.     Ruskin  no  doubt  would  have  been  ready 
to  devise  a  scheme  for  the  detection  and   reward   of 
unrecognised    genius.      But    it    would    have    taxed 
Rhadamanthus  himself  to  jiecide  between  all  the  rival 
claims.     The  fact  is  that  it  is  impossible  to  assess  the 
worth  of  all  the  various  services  of  men, without  reference 
to  the  existing  scales  of  values  ;    and  that  scale  of 
values  is  at  bottom  based  upon  supply   and   demand. 
The   claim   of  the   skilful   to  receive   more  than  the 
unskilful   lies   in    their   rarity    and   nothing    else.     If 
schoolmasters  receive  better   pay  for  teaching  Greek 
than  for  teaching  the  alphabet,  it  is  because  few  men 
have  the  opportunity  of  taking  a  classical  degree,  ajid 
of  these  fewer  still  have  the  taste  or  the  capacity  for 
teaching.     If  by  some  miracle  all  the  babies  born  since 
1850  had  been  natural  Greek  scholars  and  instinctive 
pedagogues,  it  is  more  than  probable   that   scholastic 
salaries  would  be  lower  than  they  are.     But  (to  take 
a  less  fantastic  supposition)  let  us  suppose  that  a  mine 
is  opened  in  South  Africa  which  works  for  three  years 
without  disaster.     At  the  end  of  the  third  year,  half 
the   pit   hands   develop   unmistakable    symptoms    of 
consumption  ;    and  doctors  impute  the  outbreak  to  the 
condition  of  the  mine.     If  there  were  no  falling  off  next 
year  in  the  number  of  applicants  for  work,  the  directors 
might  be  secretly  surprised  and  gratified,   but  they 
would   certainly   not   raise   the   wages.     If,   however, 
nobody  applied,  they  would  raise  the  wages  (within 
the  compass  of  what  the  mine  could  itself  afford)  until 
somebody  did  ;  and  the  wage  would  settle  at  the  precise 
amount   which   would    tempt   workmen   in   sufficient 


THE  PROTEST  OF  RUSKIN  125 

numbers.  Here,  then,  is  a  nice  question  for  dis- 
cussion, what  value  men  will  set  upon  the  loss  of  a 
lung,  a  question  to  which  no  Board  of  Assessors  that 
ever  sat  could  offer  an  adequate  solution ;  but  a 
question  which  is  solved  easily  enough  Yy  the  practical 
arithmetic  of  supply  and  demand. 

Thus  any  attempt  to  fix  the  value  of  work  by  any 
arbitrary  standard  will  be  fraught  with  real  and  almost 
insurmountable  difficulties.  Even  if  the  standard 
were  satisfactorily  settled  now  it  would  be  out  of  date 
in  a  few  years  time.  There  will  be  changes  in  men's 
habits  and  ambitions,  changes  in  their  taste  for  one 
sort  of  work  and  distaste  for  another,  changes  in  the 
productiveness  of  their  labour  and  in  the  cost  of  living. 
None  of  these  factors  but  will  have  an  influence  upon 
the  question  of  their  remuneration.  Some  of  these 
factors  no  trained  assessor  could  foresee  or  compute  ; 
others  have,  in  the  past  and  present,  proved  a 
stumbling  block  to  practical  reformers.  H,  for 
example,  women  are  to  be  absorbed  into  a  new  branch 
of  industry,  it  is  no  easy  problem  to  decide  whether 
they  shall  enjoy  the  same  rates  of  pay  as  men,  or 
whether  the  men's  labour  will  depreciate  in  value. 
Again,  the  cost  of  living  varies  in  different  parts  of 
England,  and  although  the  wages  of  both  are  fixed  at 
the  same  rate,  an  artisan  in  one  district  will  be  better 
off  than  his  fellow  in  another.  In  each  of  these  two 
cases  the  influence  of  Supply  and  Demand  will  creep 
in  and  upset  the  justice  of  our  calculations.  To 
evade  them  altogether  seems  difficult  if  not  impossible, 
but  the  most  striking  illustration  of  the  difficulty  is 
to  be  found  in  the  problem  of  the  minimum  wage — a 
reform  which  approximates  perhaps  most  nearly  to 
Ruskin's  own  suggestion.  Let  us  suppose,  that 
a  minimum  wage  is  promised  to  the  men  of  the 
Welsh  coal  fields  ;  in  consequence  of  the  increased 
drain  on  their  resources  many  owners  find  that  the 


126  NEW  FALLACIES  OF  MIDAS 

profits  of  their  mine  are  reduced  to  nothing,  so  the 
mines  are  closed.  Or,  again,  suppose  a  manufacturer 
of  toys  agrees  to  pay  his  workmen  a  wage  of  thirty 
shillings,  in  order  to  make  a  clear  profit,  he  is  then 
forced  to  raise  the  price  of  his  toys,  and  soon  he  will 
find  that  he  is  undersold  by  cheap  toys  coming  from 
abroad,  where  toy  makers  subsist  upon  a  pound.  So, 
unless  a  State  Bounty  or  a  Protective  Tariff  comes  in  to 
save  him,  his  trade  is  ruined.  Perhaps  it  may  be  as 
well  to  put  an  end  to  mines  or  industries  which  are 
either  so  unproductive  or  so  badly  managed  that  the 
employer  cannot  afford  to  pay  their  workers  a  living 
wage  and  at  the  same  time  hold  their  own  in  compe- 
tition ;  but  it  may  equally  be  argued  that,  when  the 
workers  of  a  nation  claim  for  themselves  a  high 
standard  of  living  and  yet  fail  by  the  quality  of  their 
work  to  justify  that  claim,  the  nation  must  go  under. 
Their  goods  will  become  too  dear  to  find  a  market ; 
their  trade  will  vanish  and  with  it  the  very  means,  I 
will  not  say  to  live  at  the  high  standard  they  have  set, 
but  even  to  live  at  all.  In  short,  their  defiance  of 
supply  and  demand  will  be  to  court  disaster,  for  the 
old  mole  working  below  the  surface  will  be  the  undoing 
of  them  yet. 

Yet  in  speaking  of  the  minimum  wage,  there  is 
another  possibility  of  which  we  must  take  account, 
and  which  may  even  reveal  it  in  a  better  light  as  a 
practical  and  salutary  reform.  Ruskin  struck  upon 
a  truth  which  went  even  deeper  than  perhaps  he 
knew,  when  he  described  the  benefits  of  paying  a 
"  just  "  wage.  It  is  better,  he  said,  that  one  workman 
should  receive  an  ample  wage  and  therewith  engage 
the  services  of  another  than  that  both  of  them  should 
work  for  one  employer  at  an  insufficient  wage.  There 
is  no  doubt  that  it  is  better,  and  often  the  raising  of 
wages  to  a  higher  level  may  be  a  stimulus  to  industry 
and  not  a  drag — and  this  in  two  ways.     First,  then,  it 


THE  PROTEST  OF  RUSKIN  127 

is  obvious  that  the  wage-earners'  power  of  purchase 
will  be  thereby  increased.  He  will  have  more  to 
spend  ;  he  will  discover  new  wants  to  satisfy,  and 
other  workmen  will  be  called  upon  to  produce  for  the 
satisfaction  of  those  wants.  Now,  as  we  have  seen 
above,  the  great  need  of  the  world  is  to  produce  more 
plentifully  and  more  cheaply.  If  man  chooses,  he  can, 
by  the  exercise  of  his  wits  no  less  than  by  the  exertion 
of  his  body,  devise  more  rapid  and  more  fruitful 
methods  of  production  than  he  has  in  the  past  employed. 
But  he  needs  some  stimulus  to  do  so  ;  and  the  best 
stimulus  of  all  is  a  declared  and  obvious  demand. 
Men  will  not  produce  unless  they  are  certain  that 
others  will  consume ;  therefore  the  best  means  to 
quicken  the  producer's  energy  is  to  increase  the  con- 
sumer's power  of  purchase.  So  the  universal  minimum 
wage,  though  in  the  long  run  it  must  be  expected  to 
cause  a  general  rise  in  prices,  may  in  the  meanwhile 
have  done  its  work  by  improving  man's  industrial 
methods,  drawing  out  his  inventive  faculty  and 
infusing,  as  it  were,  fresh  blood  into  the  languishing 
body  of  commerce.  But  besides  the  stimulus  which 
the  minimum  wage  may  give  to  industry  as  a  whole,  it 
may  prove  a  more  particular  advantage  to  the  trade 
which  it  immediately  concerns.  Nothing  is  more 
strange  than  the  persistent  blindness  of  employers  to 
the  very  obvious  fact  that  ill-paid  labour  does  not  pay. 
A  worker  who  is  badly  kept  and  poorly  fed  cannot  in 
reason  be  expected  to  perform  the  best  work  of  which 
he  is  capable.  The  most  crying  scandal  of  the  nine- 
teenth century  is  the  ill-health  of  our  urban  populations 
and  the  deterioration  of  the  national  physique.  Girls 
and  boys  who  are  brought  up  on  insufficient  nourish- 
ment, represent  so  much  loss  of  economic  power  to  the 
conmiunity.  Men  and  women  who  arc  compelled  to 
labour  under  distressing  or  insanitary  conditions  arc 
wasting  that  vital  energy  which  is  the  nation's  most 


128  NEW  FALLACIES  OF  MIDAS  • 

precious  capital.  It  has  now  been  abundantly  proved 
in  our  Colonies,  in  America,  and  at  last  perhaps  still 
nearer  home,  that  the  best  investment  which  an 
employer  can  make,  is  the  money  spent  upon  the  health 
and  happiness  of  his  employees.  Whatever  he  can  do 
to  ease  the  tedium  of  the  work,  to  make  surroundings 
healthy  and  cheerful,  and  even  to  provide  relaxation  for 
mind  and  body,  will  repay  him  handsomely  in  the 
increased  output  of  his  industry.  He  will  have  at  his 
command  both  more  efficient  and  more  willing 
workers  ;  and  the  goodwill  of  his  men  is  the  most 
valued  asset  of  the  wise  employer.  How  much  more 
it  is  essential  to  pay  not  a  "  living  wage  "  indeed,  but 
such  a  wage  as  will  offer  the  highest  possible  return  in 
increased  efficiency,  is  a  lesson  which  has  been  learnt 
too  slowly,  but  which  now  perhaps  is  beginning  to  be 
learnt  at  last. 

If,  however,  we  are  to  conclude  that  this  is  all  that 
Ruskin  meant,  we  have  strangely  mistaken  the 
purpose  of  his  message.  He  is  not  one  to  advocate 
philanthrophy  because  it  is  profitable  to  the  philan- 
thropist. Morality  and  self-interest,  however  fre- 
quently they  may  go  hand  in  hand,  are  not  to  be 
confounded.  Despite  the  worldly-wise  counsel  of 
proverbial  wisdom,  traders  are  not  meant  to  be  honest 
because  it  is  the  best  policy,  nor  employers  to  be  kind 
simply  because  it  pays.  There  is  a  moral  obligation, 
too,  as  well  in  one  case  as  in  the  other  ;  and  in  his  heart 
of  hearts  there  is  no  sane  person  but  acknowledges  its 
claim.  When  we  speak  of"  fair  "  prices  and  "  just  " 
wages  we  mean  something  more  than  a  cant  phrase. 
In  trading  men  have  obligations  as  well  as  privileges, 
duties  as  well  as  rights.  For  just  as  in  the  demo- 
cratic state  all  are  in  part  governors  and  in  part 
governed,  so  in  the  economic  body  all  are  in  part 
consumers,  and  all  (or  nearly  all)  in  part  producers. 
And  so,  when  we  are  tempted  to  gloze  over  the  conflict 


THE  PROTEST  OF  RUSKIN  129 

between  our  own  interest  and  our  neighbour's  and 
excuse  an  unfair  gain  which  is  another's  loss,  we 
should  do  well  to  remember  this  common  tie  of  mutual 
service  and  mutual  dependence.  Buying  and  selling, 
producing  and  consuming,  we  are  all  involved  in  one 
universal  game  ;  and  by  an  unspoken  instinct  at  least, 
if  not  by  compact,  we  all  agreed  that  this  game  should 
be  played  according  to  the  rules.  So  we  have  come  to 
speak  of  a  bargain  as  fair  or  unfair,  not  because  the 
value  of  this  or  that  is  determined  by  ethics,  or  depends 
upon  some  abstract  standard  of  right  or  wrong,  but 
because  each,  knowing  his  power  as  a  producer,  is 
minded  to  use  it  with  restraint  upon  condition  that 
his  fellows  should  do  likewise.  Madam  Do-as-you- 
would-be-done-by  holds  authority  in  trade  no  less  than 
in  other  spheres  of  human  intercourse.  In  our  social 
and  poHtical  Hfe  we  have  long  since  learnt  to  reject  the 
principle  of  "  might  is  right  " — but  we  have  still  to 
learn  that  economic  power  is  not  given  us  for  ex- 
ploitation and  misuse,  and  that  the  Ten  Command- 
ments do  not  cease  to  be  operative  behind  the  counting- 
house  door. 

To  reconcile  the  selfish  claims  of  economic  interest 
with  the  altruistic  ideals  of  moral  obligation  must 
always  be  a  difficult  task — but  most  difficult  of  all 
perhaps  for  the  employer.  For  his  responsibility  is 
heavier  than  all  others.  The  man  who  holds  such  power 
for  good  or  evil  over  the  lives  of  hundreds,  or  it  may  be 
thousands  of  his  fellow  beings,  cannot  shirk  the  respon- 
sibility of  that  tremendous  trust.  He  owes  it  to  them 
and  to  himself  and  to  the  State  that  this  trust  shall  be 
discharged  according  to  the  measure  of  his  powers 
and  his  opportunity.  The  more  honour  to  him  if  he 
discharges  it  well.  The  market,  as  Ruskin  says,  "  may 
have  its  martyrdoms  as  well  as  the  pulpit,  and  trade 
its  heroism  as  well  as  war."  This  is  in  truth  a  hard 
saying  ;    but  the  precepts  of  all  high  moralities  are 


130  NEW  FALLACIES  OF  MIDAS 

hard.  It  may  seem  as  though  the  exigencies  of  busi- 
ness leave  Httle  loophole  for  the  exercise  of  Christian 
virtues  and  that  every  act  of  buying  and  selling  must 
clash  with  the  Sermon  on  the  Mount.  Yet  in  reality 
this  conflict  between  duty  of  sacrifice  and  the  interests  of 
self  are  by  no  means  confined  to  Trade.  In  every 
phase  of  life  there  are  claims  and  counter-claims,  both 
of  them  legitimate,  yet  competing  for  our  allegiance 
and  haling  us  two  ways.  The  claims  of  the  family 
may  conflict  with  claims  of  the  community,  the 
conscience  of  the  individual  with  prerogatives  of  State, 
loyalty  to  Party  with  obedience  to  a  wider  call.  There 
is  little  or  no  direct  guidance  in  Scripture  or  elsewhere 
to  tell  us  which  of  the  two  should  be  obeyed  or  how 
far  ;  there  are  no  cut  and  dried  formulae,  by  which 
these  puzzles  may  be  solved.  Even  the  most  pious 
priest  must  balance  the  satisfaction  of  his  own  needs 
against  the  satisfaction  of  the  needs  of  others.  Does 
he  starve  himself  to  feed  the  poor,  who  will  be  left  to 
read  the  services  in  church  ?  If  he  gives  up  his  whole 
day  to  parochial  ministrations  where  will  he  find  time 
for  the  study  of  theology,  or  for  intellectual  and  physical 
relaxation  which  is  needed  to  keep  his  body  fit  and  his 
mind  alert  ?  So  too  the  man  of  business  may  honestly 
maintain  that  a  motor-car  and  a  comfortable  house  are 
an  indispensable  to  the  efficient  performance  of  his 
duties — and,  in  general,  the  problems  which  beset  his 
path  are  different  only  in  degree  from  the  problems 
which  beset  the  path  of  others.  To  keep  up  "  appear- 
ances "  to  enter  society,  educate  his  children  and 
cultivate  his  mind  ;  all  these  are  legitimate  claims 
upon  his  purse  ;  and  so  long  as  he  shows  generosity 
and  fairness  in  his  business  dealings  and  decent  moder- 
ation in  his  private  habits,  his  employees  will  be  the 
last  to  grudge  him  the  satisfaction  of  such  claims. 
But  the  counter-claim  still  stands — there  is  the  welfare 
of  those  whom  he  employs  to  be  considered.     If  claim 


THE  PROTEST  OF  RUSKIN  131 

and  counter-claim  can  both  be  satisfied,  no  more  need 
be  said.  But  if  there  is  a  clash  of  interests  and  one  or 
the  other  must  be  sacrificed,  then  a  balance  must  be 
struck  and  a  choice  be  made — and  we  cannot  in  good 
conscience  make  that  choice  upon  any  but  the  highest 
grounds.  It  is  for  each  to  see  that  his  eye  is  single  in 
the  choosing  and  that  he  uses  no  weighted  scales. 


Chapter  XII. 

THE  RISE  OF  LABOUR. 

(i-)- 
But    something    more    forcible    than    Ruskin's   good 

advice  was  needed  to  bring  the  employers  to  a  better 
frame  of  mind  ;  and  instead  of  waiting  their  conversion, 
whether  to  Christianity  or  to  common  sense,  the 
workers  were  engaged  in  forging  a  weapon  of  their 
own,  and  that  weapon  was  the  strike.  If  it  is  the  poor 
man's  necessity  to  offer  his  labour  in  exchange  for 
daily  bread,  it  is  no  less  his  liberty  to  refuse  it.  In  so 
doing,  he  commits  no  wrong.  He  is  under  no  obli- 
gation to  work,  if  he  prefers  to  starve  ;  nor  is  he  bound 
by  any  life-long  contract  such  as  circumstances  im- 
posed upon  the  slave  or  serf.  In  theory  at  least  the 
modern  labourer  is  a  free  man  ;  and  whether  or  no 
it  be  a  wise  policy  for  him  to  withhold  his  labour,  he 
certainly  has  as  much  right  to  do  so,  as  the  farmer  to 
withhold  his  pig  from  market.  The  Strike  then  is  in 
essence  neither  anarchy  nor  crime  ;  it  is  simply  the 
normal  weapon  of  one  party  to  a  bargain.*  It  suffers,  it 
is  true,  from  one  natural  and  fundamental  \veakness,  in 
that  the  employer  is  in  possession  of  the  necessities  of  life 
and  the  labourer  is  not.  So  his  bargaining  power  must 
always  be  weaker,  man  for  man,  than  is  his  master's,  at 
worst  he  is  wholly  at  the  other's  mercy,  as  the  starving 
man  is  at  the  mercy  of  the  man  with  bread.  At  best 
he  is  still  fighting  an  unequal  battle,  as  with  blunder- 

*  Whether  the  right  to  strike  may  not  ultimately  develop  into  a 
dangerous  form  of  monopoly,  is  another  matter — to  be  discussed 
hereafter. 

132 


THE  RISE  OF  LABOUR  133 

buss  against  gun.  One  thing,  however,  he  may  do 
to  redress  the  balance  ;  he  may  persuade  his  fellows 
to  concerted  action.  Unity  is  strength  ;  and,  taken 
in  combination,  the  bargaining  power  of  the  workers 
may  become  equal,  perhaps  superior  to  the  bargaining 
power  of  the  employer.  For,  though  the  employer 
may  suffer  no  serious  damage  by  the  loss  of  a  particu- 
lar workman,  it  must  mean  ultimate  disaster  if 
nobody  will  work  for  him  at  all.  So  from  the  first  it 
has  been  the  worker's  desire  to  promote,  as  it  has  been 
(until  recent  years)  the  employer's  desire  to  restrict, 
the  use  of  industrial  combination. 

Until  after  Waterloo  was  fought,  and  the  old  order 
of  things  had  passed  definitely  away,  the  power  of  the 
employer  held  the  field  unchallenged.  During  the 
latter  half  of  the  preceding  century,  those  new  pro- 
cesses of  manufacture  which  brought  the  Industrial 
Revolution  into  being,  had  not  merely  begun  to  spread 
terrible  distress  among  the  workers,  but  had  indirectly 
caused  a  serious  infringement  of  their  rights  and 
liberties.  The  introduction  of  new  processes  of  manu- 
facture had  led  to  the  widespread  employment  of 
children  and  women,  and  this  had  very  naturally 
aroused  the  resentment  of  the  adult  workers  who  found 
themselves,  temporarily  at  least,  displaced.  By  way 
of  protest  they  appealed  to  the  Statute  of  Apprentices, 
an  obsolete  law  of  Queen  Elizabeth's  reign  ;  and  they 
even  attempted  by  some  sort  of  combination  to 
enforce  its  observance.  But  the  employers  went  one 
better  ;  and  in  the  last  year  of  the  century  secured  the 
passage  of  a  law  by  which  all  such  combination  "  in 
restraint  of  trade "  was  positively  forbidden.  But 
such  repressive  measures  could  hardly  be  permanent. 
More  and  more  the  workers  became  sensible  of  the 
vileness  of  their  own  condition,  of  the  glaring  contrast 
between  poverty  and  wealth,  and  of  the  inhuman 
attitude  of  their  masters.    And  along  with  this  growing 


134  NEW  FALLACIES  OF  MIDAS 

discontent,  came  new  and  wider  opportunities  for 
concerted  action.  Crowded  together  into  the  centres 
of  trade  and  industry,  they  were  now  better  able  to  take 
counsel  together  than  they  had  been  when  scattered 
among  the  villages  and  country  towns.  Education 
too,  was  slowly  but  surely  spreading  ;  men  began  to 
think  for  themselves  ;  and  ideas  bred  by  the  success  of 
the  French  Revolution  were  taking  root  downwards. 
A  bitterness  sprang  up  between  rich  and  poor  which, 
as  the  century  wore  on  and  democracy  matured,  was 
to  develop  into  a  definite  antagonism  and  to  range  the 
classes  in  two  hostile  camps. 

Oddly  enough,  however,  it  was  to  the  men  of  the 
school  of  Adam  Smith  that  the  workers  first   owed 
their    deHverance.      In     1824     these     champions     of 
economic  freedom  extorted  from  an  unwilHng  ParHa- 
ment    the    Repeal    of    the    Combination    Laws.     The 
workers  were  now  free  to  combine  (though  only  it  is 
true   for  peaceable  discussions),    and    with    that    the 
history     of    Trade     Unionism     began.     Though      the 
earhest  attempts  at  combination  were  short-lived,  there 
arose  in  the  course  of  the  Forties  several  sturdy  associ- 
ations, which  survived  in  the  face  of  much  difficulty 
and   opposition,    and   many   of   which    (such   as    the 
Operative  Bricklayers'  Society  and  the  Amalgamated 
Society  of  Engineers)  are  still  in  being  and  are  known 
as  the  Old  Unions.     As  yet,  however,  the  battle  was 
only  half  won.     The  Repeal  of  the  Combination  Laws, 
while  it  allowed  men  to  associate  in  Unions  for  the 
discussion  of  wages  and  working  hours,  had  yet  given 
the  Unions  no  legal  status  and  no  protection  for  their 
funds.     One  Justice  of  Queen's  Bench  openly  hinted 
that  all  combination  to  raise  wages,  were  its  methods 
never  so  peaceful,  was  a  conspiracy  and  a  crime  before 
the  law.     Such  opinions  were  little  likely  to  conciHate 
the  workers  ;    and  by  i860  the  Trade  Unionists  were 
beginning  to  act  with  increasing  violence.     In  Sheffield 


THE  RISE  OF  LABOUR  135 

a  gunpowder  explosion  was   traced   to  their  agency, 
and  a  certain  saw-grinder,  James  Lindley  by  name, 
was  murdered  by  a  shot  from  an  air-gun,  for  breaking 
the    regulations    of    his    Union.     The    country    was 
seriously    perturbed.      A      Royal     Commission     was 
appointed  ;    and  in  the  sequel  the  cause  of  labour  won 
a  substantial  victory.     By  the  Acts  of  1871  and  1875 
the  position  of  Trades  Unions  and  in  particular  their 
right  to  hold  land  and  accumulate  funds,  was  formally 
recognised  by  law.     These  funds  might  now  be  used 
at    the    Unionists'    discretion,    on   condition    that    an 
annual  account  of  them  was  presented  to  the  Public 
Registrar.     And,  provided  that  the  Unions  committed 
no  act  which  in  a  private  citizen  would  be  punishable 
as  crime,  they  were  henceforward  free  to  pursue  what 
policy  they  chose.     The  Charter  of  Labour  was  now 
won ;     and    the    efficacy    of    combination    definitely 
assured,  with  the  natural  result  that  in  the  last  quarter 
of  the  century  the  number  of  the  Unions  was  nearly 
doubled.     These    new    Unions    passed    rapidly    from 
strength  to  strength  ;    they  found  leaders    of    energy 
and  resolution  in  such  men  as  John  Burns,  Ben  Tillett 
and  Tom  Mann,  the  trio  who  first  won  their  spurs  in  the 
great  Dock  Strike  of  1885.     By  continuous  warfare  the 
tJnions    quickly    gained    ground,    consolidated    their 
position  and  reinforced  their  ranks.     Since  the  turn  of 
the  century  the  actual  number  of  Unions  has  diminished, 
but   their   membership   has   increased    by    leaps    and 
bounds.     From  upwards  of  two  millions  it  rose  in  a 
dozen  years  to  four  ;    there  are  perhaps  nearer  five 
million  unionists,  male  and  female,  in  the  country  at 
the    present    day.       All     the     best-paid     trades     arc 
organised  ;     miners,    bricklayers,    boiler-makers,    ship 
builders,     bootmakers,     gas-workers,     engineers     and 
transport  workers,  beside  a  host  of  others — and  even 
before    the   war  they  were  among  the  most  powerful 
forces  in  the  country,  and  by  constant  pressure  they 

10 


I36  NEW  FALLACIES  OF  MIDAS 

had  again  and  again  defeated  the  employers  and  won 
substantial  improvement  of  their  lot.  But  such  a 
strong  and  resolute  movement  was  not  likely  to  con- 
fine its  energies  for  long  to  the  industrial  sphere  alone 
— and  through  their  Parliamentary  representatives 
they  had  entered  the  political  arena.  The  Labour 
Party,  though  numerically  weak,  made  deft  use  of  its 
alliance  with  the  Liberal  coalition,  and  during  the  first 
decade  of  the  century  it  was  not  without  its  triumphs. 
It  has  emerged  from  the  crisis  of  war  more  formidable 
than  ever.  At  first  suspected  and  despised  on  account 
of  the  pacifist  tendencies  of  its  leading  members,  it 
has  insisted  upon  making  the  voice  of  Labour  heard, 
and  when  the  grievances  and  even  threats  of  the  in- 
dustrial population  could  no  longer  be  ignored,  a 
Ministry  of  Labour  was  established  ;  the  Labour  Party 
was  granted  a  place  in  the  Cabinet  of  five  ;  and  who 
shall  say  what  part  it  may  not  play  even  yet  in  shaping 
the  future  course  of  English  or  European  history. 

This  political  achievement  was  the  fruit  of  the  New 
Unionism  rather  than  the  Old.  The  senior  societies 
founded  in  Mid- Victorian  times  had  been  content  to 
leave  politics  alone.  They  had  endeavoured  to  improve 
the  workers'  lot  chiefly  in  two  ways,  first  by  bringing 
direct  pressure  to  bear  on  the  employers,  presenting 
their  demands  for  better  conditions,  higher  wages  and 
shorter  hours,  and  finally  enforcing  them  by  strike  or 
threat  of  strike ;  secondly,  by  organising  mutual 
assistance  and  insurance  among  the  workers  themselves, 
forming  Benefit  Funds,  and  out  of  these  relieving  the 
victims  of  accident,  disease  or  unemployment.  But 
for  a  very  good  reason  this  second  aim  became  dis- 
credited among  the  newer  Unionists.  The  heavy 
inroads  which  the  benefit  payments  might  make  upon 
the  Union  funds,  were  liable  to  drain  their  resources 
and  reduce  their  fighting  strength.  In  1900  the  danger 
of  financial  exhaustion  was  further  increased  by  the  Taff 


THE  RISE  OF  LABOUR  137 

Vale  Decision.  A  strike  had  broken  out  on  the  Taff 
Vale  Railway,  and  the  company  took  legal  proceedings 
against  the  men  for  the  damage  done  in  the  strike. 
The  case  was  carried  from  court  to  court ;  and  finally 
the  House  of  Lords  decided  that  a  registered  Union 
might  be  sued  at  law  and  was  itself  liable  for  injuries 
inflicted  by  its  members.  The  decision  involved  a 
new  menace  to  Union  funds,  and,  pending  its  reversal, 
the  argument  for  abandoning  the  expenditure  on 
benefits  was  overwhelming.  The  upshot  was  that  a 
fresh  impetus  was  given  to  the  alternative  policy  upon 
which  the  new  Unions  had  already  embarked.  This 
policy,  as  we  have  shown  above,  aimed  at  reinforcing 
industrial  pressure  by  parliamentary  action,  and  at 
achieving  by  public  legislation  what  private  bargain- 
ing could  not  secure  them.  Extravagant  hopes  of 
speedy  victory  were  at  first  entertained,  but  were 
doomed  to  inevitable  disappointment.  The  repre- 
sentatives of  Labour  formed  but  a  mere  handful  in  the 
House  of  Commons  ;  and  even  these  lacked  ripe 
experience  for  the  difficult  game  of  politics.  None 
the  less,  whether  through  the  direct  agency  of  the  party 
or  whether  because  the  new  crusade  focussed  public 
attention  more  closely  on  industrial  problems,  their 
efforts  were  by  no  means  barren.  During  the  last 
twenty  years  Act  upon  Act  had  been  passed,  reforming 
and  regulating  the  relations  between  Capital  and 
Labour.  Under  the  Employers'  Liability  Act  masters 
are  bound  to  compensate  their  men  for  injuries  received 
in  carrying  out  their  duties.  This  and  the  institution 
of  Old  Age  Pensions  have  removed  the  more  pressing 
needs  for  Benefit  Funds.  Under  the  Insurance  Act 
the  members  of  certain  trades  are  now  compulsorily 
insured  against  unemployment.  Many  gross  abuses 
have  been  done  away.  In  some  ill-paid  or  "  sweated  " 
industries  (such  for  instance  as  that  of  chain-making) 
the  payment  of  a  "  living  wage"  has  been  enforced. 


138  NEW  FALLACIES  OF  MIDAS 

Even  when  the  Welsh  miners,  a  far  more  prosperous 
class,  struck  for  a  minimum  wage,  their  victory  was 
blessed  by  the  sanction  of  the  law.  The  Board  of 
Trade  has  bestirred  itself  to  mitigate  the  evils  of  un- 
employment and  industrial  strife  (though  not  always 
in  the  way  which  Labour  itself  would  choose).  Sir 
George  Askwith  and  its  other  representatives  are 
constantly  at  their  work  of  reconciliation  and  arbi- 
tration in  disputes.  Labour  bureaux  of  information 
have  been  established  up  and  down  the  country  to 
remedy  the  frequent  hardships  of  fluctuating  and 
intermittent  trades.  Acts  have  been  passed  providing 
for  Insurance  against  ill-health  or  unemployment,  and 
for  compensation  in  case  of  accidents  or  injury.  One 
way  and  another.  Politics  have  played  no  small  part 
in  industrial  evolution ;  and  at  the  present  time 
Parliament  seems  to  offer  greater  scope  than  ever  for 
the  supporters  and  representatives  of  Labour.  Though 
before  the  war  their  party  was  losing  caste  with  the 
rank  and  file,  and  disappointed  prophets  declared  it  to 
be  a  failure,  the  day  does  not  now  seem  so  very  far 
distant  when  a  Labour  Ministry  may  be  seated  upon 
the  Treasury  Bench. 

(ii.) 

But  the  success  which  Labour  has  hitherto  achieved 
has  not  been  won  without  much  careful  thought  and 
elaborate  organisation.  It  is  only  in  recent  years  that 
the  full  possibilities  of  the  movement  have  been 
realised  ;  and  in  the  meantime  both  parties  in  the 
conflict  have  been  busy  improving  their  methods  and 
enlarging  their  resources.  The  employers  on  their  part 
have  not  been  idle.  Seeing  how  the  industrial  pressure 
of  strikes  and  agitation  was  increasing  and  how  through 
its  Parliamentary  agents  Labour  had  begun  to  lay  a 
faltering  hand  even  upon  the  reins  of  political  po^\er, 
they   could   no  longer  be  indifferent   to   this   double 


THE  RISE  OF  LABOUR  139 

menace.  In  the  early  days  of  Trades  Union  history, 
the  employers'  chief  safeguard  had  been  the  numerical 
weakness  of  the  Unionists  themselves.  So  long  as  a 
small  fraction  only  of  the  men  were  combined  against 
them  the  capitalists  felt  little  cause  for  real  anxiety. 
They  needed  but  to  count  the  cost  before  embarking 
upon  a  trial  of  strength  and  decide  whether  the 
temporary  dislocation  of  business  was  worth  their 
while  ;  the  final  issue  of  the  struggle  was  hardly  in 
question.  There  existed  still  a  vast  reservoir  of 
unorganised  labour,  upon  which  they  could  draw  to 
fill  the  places  of  recalcitrant  unionists  ;  and,  while 
"  black  leg  "  labour  was  plentiful,  no  Union  could  hope 
for  complete  or  permanent  success.  But,  as  time  went 
on,  and  the  Unions  multiplied  exceedingly,  employers 
took  alarm  ;  and  though  the  strength  of  organised 
labour  is  still  numerically  weak  (even  to-day  it  counts 
for  barely  a  third  of  the  industrial  population)  it  was 
felt  that  the  time  had  come  for  counter  measures.  As 
for  the  men,  so  equally  for  the  masters,  the  wisest 
tactics  were  to  close  their  ranks.  Combination  can 
best  be  met  by  combination.  The  Employers'  Lock- 
out is  the  obvious  answer  to  the  workman's  strike. 

In  prosperous,  chaotic,  easy-going  England  the 
process  of  combination  has  been  slow ;  employers 
clinging  to  their  traditional  belief  in  economic  liberty 
and  unrestricted  competition,  have  been  loth  to  tie 
their  hands.  But  among  other  nations,  to  Vv^hom  the 
discipline  of  centralised  authority  is  less  distasteful, 
developments  have  been  more  rapid  and  deliberate. 
In  Sweden,  for  example,  the  two  opposing  parties  are 
now  entrenched  in  two  solid  Federations,  all  the 
employers  on  one  side,  upwards  of  half  the  working 
population  on  the  other.  Upon  the  first  hint  of  serious 
trouble  the  employers  mobilise  their  forces  for  a  general 
lock-out.  In  1906  they  won  the  day  merely  by  threat 
of  action.     In  1909  the  Unions  replied  by  declaring 


140  NEW  FALLACIES  OF  MIDAS 

a  general  strike.  The  moment  was  ill  chosen  ;  trade 
happened  at  the  time  to  be  bad  ;  so  it  suited  the  em- 
ployers' book  to  close  the  workshops  and  the  men  were 
easily  defeated.  In  other  countries,  too,  analogous 
developments  have  taken  place ;  in  well-drilled 
Germany  the  unions  of  employers  known  as  Kartels, 
have  gained  considerable  power.  But,  here  in  England 
open  organisation  has  hardly  been  attempted.  Never- 
theless, as  the  strength  and  unity  of  the  Labour 
movement  grows,  a  similar  policy  will  certainly  be 
forced  upon  our  manufacturers.  They  can  no  longer 
afford  the  luxury  of  their  old  independence.* 

For  the  Unions,  on  thqir  part,  have  not  been  slow 
to  see  the  advantages  of  closer  co-operation.  Up  to  the 
present  there  is  indeed  no  central  body  to  direct  and 
co-ordinate  the  policy  of  the  whole  movement.  Such  a 
function  is  very  inadequately  performed  by  the  Trades 
Union  Congress,  half  committee  which  formulates  the 
course  of  Labour's  political  campaign,  half  debating 
society,  where  academic  resolutions  are  discussed  and 
enthusiasts  can  air  their  high-flown  and  fanciful 
ideals.  On  the  other  hand,  some  practical  steps  have 
been  taken  to  draw  the  bonds  together  ;  alliances  have 
already  been  formed  between  various  unions  some- 
times by  complete  fusion  or  amalgamation  (such  as  took 
place  in  recent  years  between  three  out  of  the  four 
great  Railway  Unions),  sometimes  by  a  more  tentative 
policy  of  federation.  In  the  first  year  of  the  war, 
for  instance,  the  three  powerful  societies  of  the  Rail- 
way men,  the  Coalminers  and  the  Transport  Workers, 
entered  upon  a  mutual  agreement  for  united  action. 
But  there  are  so  many  objections  and  obstacles  to  such 
a  course,  that  complete  solidarity  is  still  very  far  from 

*  Within  the  last  twelve  months  very  decided  steps  have  been 
already  taken.  The  prospect  of  post-bellum  competition  against 
Germany  has  stirred  the  employers  to  combination  far  more  than  the 
threats  of  Labour  could  have  done. 


THE  RISE  OF  LABOUR  141 

being  realised.  In  the  first  place,  centralisation  of 
any  sort  means  officials  ;  and  officialdom  has  never  been 
popular  with  Englishmen.  Unless  the  methods  of 
election  and  representation  are  constantly  revised, 
the  leaders  lose  touch  with  the  men  ;  they  fail  of  the 
vigour  and  audacity  needed  for  constructive  action  ; 
and  Trade  Unionism  may  very  easily  become  as  sterile 
and  inert  as  any  political  bureaucracy.  Worse  still, 
there  is  not  seldom  jealousy  between  different  trades  ; 
and,  as  is  only  natural,  every  union  is  loth  to  involve 
itself  in  troubles  which  are  not  its  own.  Finally,  as  we 
have  said  already,  the  unions  are  far  from  having  the 
whole  force  of  labour  at  their  back.  Partly  from 
ignorance  of  their  value,  partly  from  distrust  of  their 
methods,  and  dislike  of  the  restrictions  they  impose, 
even  more  from  inability  to  pay  the  subscription  to  the 
Union  funds,  the  large  mass  of  workers  still  remains 
outside.  All  manners  of  efforts  have  been  made  to  induce 
them  to  come  in.  Those  who  are  members  already 
are  forbidden  in  any  way  to  assist  non-unionists,  often 
to  work  with  non-unionists,  and  even  (during  strikes) 
to  touch  goods  which  non-unionists  have  handled.  In 
season  and  out  of  season,  by  fair  methods  and  foul, 
the  Gospel  of  Unionism  has  been  preached  that  by 
whatever  means  converts  may  be  brought  into  the  fold. 
During  a  strike  a  black-leg  labourer  is  made  to  go  in 
terror  of  his  life  ;  and  even  the  "  peaceful  picketing  " 
allowed  by  law  can  often  be  a  very  formidable  method  of 
of  coercion.  Such  tactics,  it  is  true,  are  a  grievous 
violation  of  the  independent  labourer's  liberties  and 
rights.  The  Unions  are  hard  task-masters  ;  their  rules 
place  most  tyrannical  restrictions  not  merely  upon  the 
output  of  each  member's  work,  but  upon  the  amount  of 
each  member's  wage.  There  may  seem,  perhaps,  small 
justice  in  compelling  others  to  submit,  against  their 
will  and,  as  they  think,  against  their  interest,  to  such 
arbitrary  regulations.     But  from  the  Unionist's  point 


142  NEW  FALLACIES  OF  MIDAS 

of  view  the  non-Unionist  is  to  blame,  not  he.  Who- 
ever underbids  his  fellow  is  considered  a  traitor  to  the 
sacred  cause.  Whether  the  non-unionist  does 
unionist's  work  at  a  smaller  wage,  or  whether  he  does 
more  work  than  the  unionist  at  the  same  wage,  it  is  all 
one.  He  is  playing  the  employer's  game,  and  stealing 
a  march  unfairly  upon  comrades  whose  interest  should 
also  be  his  interest,  and  whose  cause  his  cause.  And  to 
make  his  crime  the  blacker,  he  is  often  enjoying  the 
better  conditions,  better  wages  and  better  hours  which 
are  the  hard  won  fruits  of  Unionists'  exertions.  It 
seems  a  coward's  part  to  profit  by  the  battles  which 
others  have  fought  and  won,  and  himself  to  stand 
aside. 

When,  therefore,  the  Unions  set  limitations  upon 
work  and  pay,  it  is  not  from  pure  jealousy  of  the  keen 
and  strenuous  workman.  The  Unionist  is  not  the  fool 
that  some  people  imagine  ;  and  in  most  cases  a  reason 
well  thought  out  underlies  his  seemingly  irrational 
procedure.  He  has  fought  hard  and  long  for  the 
improvement  of  his  wages  and  now — a  far  more  subtle 
and  complex  task — his  effort  is  mainly  centred  upon 
the  improvement  of  his  conditions.  In  this  struggle 
constant  vigilance  and  foresight  will  be  needed,  or 
he  will  be  thwarted  at  every  turn  by  the  employers. 
Suppose,  for  example,  that  he  contrives  to  limit  the 
hours  of  the  working-day.  The  employer  at  once  shifts 
his  ground  and  offers  extra  pay  for  overtime  work. 
How  unreasonable  of  the  Unions  to  prevent  the  sturdy 
workman  from  thus  adding  to  his  wage  !  Yet  is  it  ? 
Who  can  say  that  his  gain  may  not  be  another's  loss  ? 
His  extra  work  may  enable  the  employer  to  dispense 
with  the  services  of  the  less  active.  It  is  probable,  too, 
that  in  the  long  run  wages  themselves  will  be  affected. 
The  employer  will  not  be  able  to  afford  to  pay  more  for 
ten  hours'  work  than  he  has  done  in  the  past  ;  and 
those  who  can  work  but  eight  will  be  the  first  to  suffer. 


THE  RISE  OF  LABOUR  143 

So  to  protect  the  weaker  brethren  who  would  thus  be 
put  to  a  serious  disadvantage   and   perhaps  lose  their 
places  altogether,  the  Unionists  may  be  forced  to  set 
some   limit    to    this   practice    and   curtail    the    oppor- 
tunities   for    overtime   for   all   alike.*     Again,    to   the 
outsider,  it  seems  mere  commonsense  that  when  for 
some  reason  the  hands  in  one  department  are  idle, 
their  labour  should  be  used  in  some  other  department 
or  on  some  other  process.     But  the  normal  performers 
of  that  process  do  not  regard  it  in  that  light.     They 
merely   see   their   own   skill   set   at   a   discount,    their 
monopoly  threatened  and  themselves  perhaps  in  the 
issue   driven   out   of   employment.     So   Unionists   are 
naturally  jealous  not  only  of  their  rights  as  against  the 
employer,  but  as  against  the  non-unionists  as  well — 
and  in  self-defence  they  have  built  up  a  whole  network 
of  usages  and  regulations  some  actually  recorded  on 
paper,  some  handed  down  by  tradition.     These  regu- 
lations differ  from    district  to  district,  often  from  shop 
to    shop.     They    were    well    described    by    a    corres- 
pondent in  the  Times  of  January,   1917,  as  follows  : 
"  They   embrace,"   he  said,   "  not   only   the  standard 
rate  of  wages,  and  the  length  of  the  normal  working  day, 
together  with  arrangements  for  overtime,  night  work, 
Sunday   duty,    mealtimes  and  holidays,   but   also  the 
exact  class  of  operatives  (apprenticed,  or  skilled,  semi- 
skilled or  unskilled,  labourers  or  women)  to  be  engaged 
or  not  engaged  for  various  kinds  of  work,  upon  particu- 
lar  processes,    or    with    different    types    of    machine  ; 
whether  non-unionists  should  be  employed  at  all  ;  what 
processes   should   be   employed  for   particular    tasks  ; 
what  machines  should  be  used  for  particular  jobs  ;   how 
machines  should  be  placed  in   relation   to  each  other, 

*  Unionists'  opinions  differ  on  this  point,  some  being  in  favour  of 
restricting  "  overtime  "  work,  others  opposing  such  restriction. 
Certainly  whatever  may  be  urged  on  behalf  of  Trades  Union  action, 
there  is  a  most  real  danger  lest  it  should  in  this  matter  at  least,  damp 
the  ardour  and  check  the  ambitions  of  tlie  genuine  hard-worker. 


144  NEW  FALLACIES  OF  MIDAS 

and  the  speed  at  which  they  should  be  worked ; 
whether  one  operative  should  complete  a  whole  job, 
or  attend  only  to  one  machine  or  form  part  of  a  team 
of  specialised  operatives  each  doing  a  different  process  ; 
what  wages,  if  any,  should  be  paid  in  the  intervals 
between  jobs,  or  whilst  waiting  for  material,  and  what 
notice  of  termination  of  engagement  should  be  given  ; 
whether  boys  and  girls  or  young  persons  should  be 
employed  at  all,  or  in  what  processes  or  with  what 
machines,  or  in  what  proportion  to  adult  workmen  ; 
whether  remuneration  should  be  by  time  or  by  the 
piece,  and  under  what  conditions,  at  what  rates  or  with 
what  allowances  ;  and — perhaps  where  it  prevailed 
most  severely  criticised  of  all,  but  by  no  means 
universally  existing — what  amount  of  output  by  each 
operative  should  be  considered  a  fair  day's  work,  not  to 
be  considerably  exceeded  under  penalty  of  the  serious 
displeasure  of  the  workshop." 

These  and  other  like  concessions  wrung  from  the 
master  by  the  men,  or  imposed  by  the  men  upon  their 
fellows,  are  a  striking  testimony  to  the  success  of  Trades 
Union  action,  but  it  must  not  be  forgotten  that  this 
success  was  double-edged.  Upon  the  one  hand,  it  is 
true,  that  by  nearly  a  century  of  effort  a  marvellous 
transformation  has  been  wrought  in  the  status  of  the 
working  man.  But  see  also  how  damaging  has  been 
the  cost.  In  the  article  above  quoted,  it  was  pointed 
out  how  much  production  suffered  from  these  hamper- 
ing restrictions  ;  and  how  immense  has  been  the  gain 
when  under  stress  of  war  such  practices  are  largely 
swept  away.  No  sooner  was  the  check  removed  from 
individual  effort,  no  sooner  was  prejudice  and  torpor 
replaced  by  energy  and  goodwill,  new  machinery  intro- 
duced and  old  machinery  reconstructed  or  improved, 
than  production  increased  with  giant  strides.  Already 
in  eighteen  months  after  the  Ministry  of  Munitions  was 
first  established,  a  new  Industrial  Revolution  had  taken 


THE  RISE  OF  LABOUR  145 

place  ;  and  the  20,000  establishments  working  under 
Government  control  were  "  turning  out  on  an  average 
more  than  twice  the  product  per  operative  that  they 
did  before  the  war."  However  workmen  may  grumble 
against  employers'  profits,  whatever  they  may  think 
about  the  unequal  distribution  of  the  spoils,  such 
an  increase  could  not  but  redound  to  their  gain,  such 
retardation  as  had  existed,  could  not  but  mean  their 
loss. 

Nor  was  this  the  only  defect  which  marred  the 
success  of  Unionist  achievement.  Even  the  proudest 
victory  may  in  the  event  look  very  like  defeat.  The 
minimum  wage,  for  instance,  turns  out  in  practice  to  be 
no  unmixed  blessing  ;  for,  if  the  employer  is  forced  to 
pay  a  statutory  wage,  he  will  require  in  compensation 
a  full  and  adequate  return  in  work  ;  to  retain  the 
services  of  old,  weak,  or  inefficient  workmen  will  not 
be  worth  his  while  ;  and  so,  what  is  gain  to  some 
unionists,  brings  dismissal  and  penury  to  others. 
Even  strikes,  however  triumphant,  may  mean  time 
wasted,  markets  lost,  trade  crippled.  In  the  cotton 
industry  the  cupidity  of  the  workers  looked  at  one  time 
like  driving  capital  out  of  the  business.  Even  pros- 
perous owners  will  not  embark  on  new  and  costly 
ventures,  if  they  know  that  a  fresh  demand  for  higher 
wages  will  surely  follow.  Struggling  firms  will  shut 
down  rather  than  run  their  business  at  a  loss.  If 
trade  suffers  so  must  the  workman  ;  and  if  the  work- 
men are  ready  to  "  down  tools  "  upon  the  smallest 
provocation.  Trade  cannot  prosper  amid  a  state  of 
constant  strikes.  More  deleterious  still  than  open 
warfare,  are  those  subterranean  tactics  which  go 
under  the  common  name  of  "  ca'  canny."*     Instead  of 

♦  The  term    and  the  practice  originated  in    the    Building  Trade. 
Masons  saw   that   fas    there   were  only  a  certain   number  of    houses 
to  be  built)  the  quicker  the  job  was  done  the  longer  would  be  the  period 
of  unemployment  that  would  follow.     So  they  deliberately  adopted  the 
plan  of  making  the  job  last  as  long  as  they  could,  forbidding  Union 


146  NEW  FALLACIES  OF  MIDAS 

declaring  an  open  strike  workmen  will  adopt  the 
insidious  alternative  of  a  "  bad  day's  work  for  a  bad 
day's  pay."  They  may  even  imitate  the  Italian 
railwaymen,  who  threw  the  whole  transport  service 
into  utter  confusion  by  literal  obedience  to  the  com- 
panies' instructions  ;  or  with  a  still  more  subtle  irony, 
they  may  do  their  work  very  slowly  and  do  it  very  well.* 
When  in  this  way  the  operatives  agree  with  one  consent 
to  limit  the  output  by  deliberate  slackness,  the  manage- 
ment is  helpless,  profits  drop,  and  yet  the  quarrel 
cannot  be  brought  to  a  clear  issue,  and  once  more  the 
workers  suffer.  Like  the  dog  which  lost  his  bone  by 
trying  to  catch  its  reflection  in  the  water.  Labour 
has  fixed  its  eye  upon  a  shadow.  To  the  more  solid 
benefits  of  maximum  production  it  is  blind. 

Little  wonder  then  that  such  violent  methods  find 
small  favour  with  a  large  section  of  the  workers. 
Partly  from  short-sighted  ignorance,  partly  from  the 
sane  conservatism  of  the  British  workman,  there  is  a 
dislike  of  pushing  matters  to  extremes.  Com- 
promise and  conciliation  are,  in  general,  more  attractive 
to  them.  They  prefer  to  avoid  open  warfare,  if 
differences  can  be  settled  by  diplomacy.  The  repre- 
sentatives of  masters  and  men  may  meet  together, 
grievances  may  be  discussed,  an  ultimatum  perhaps  be 
delivered.  Each  party  can  compute  the  strength  and 
advantage  of  the  other  ;  each  knows  what  force  it 
holds  in  reserve  itself.  If  war  can  be  averted,  it  is  to 
the  interest  of  both  sides  to  avert  it,  and  more  often 
than  not,  it  is  found  possible  to  "  agree  with  the 
adversary  in  the  way."     The  use  of  conciliation  which 

members  to  lay  more  than  a  fixed  number  of  bricks  per  hour,  etc. 
There  is  always  a  danger  that  this  form  of  protest  may  be  used  offen- 
sively as  well  as  for  the  more  legitimate  purpose  of  self-defence — and 
in  other  industries  where  it  might  be  even  more  effective  and  more 
injurious  to  the  public  interest. 

*  This  practice  is  known  as  '  sabotage '  or  '  feet  shuffling.' 


THE  RISE  OF  LABOUR  147 

in  countries  like  Australia  has  been  forced  by  law,  is  in 
England  a  natural  growth.  The  relations  between 
masters  and  men  are  often  cordial,  sometimes  there  is  a 
mutual  understanding  and  a  reciprocal  policy  of  "  give 
and  take."  The  Boiler  Makers  and  Iron  and  Steel 
Shipbuilders'  Society  are  even  pledged  to  compensate 
the  masters  for  bad  workmanship  or  breach  of  faith. 
A  similar  agreement  exists  between  the  Engineers  and 
the  employers  of  some  districts,  where  good  work  is 
rewarded  by  a  premium  bonus.  But  in  general,  such 
evidence  of  mutual  confidence  is  rare  ;  more  fre- 
quently such  diplomacy  is  nothing  but  the  velvet 
glove.  Labour  means  to  come  by  its  own,  and  beneath 
the  surface  there  is  everywhere  suspicion,  distrust,  and 
preparation  for  a  yet  sterner  fight. 

(iii.) 

Through  whatever  phases  the  industrial  war  may 
pass,  and  whatever  may  be  the  immediate  question  in 
dispute,  the  central  issue  is  eternally  the  same — the  issue 
between  the  man  who  has  property  and  the  man  who 
has  none.  Until  the  close  of  the  last  century,  the  rate 
of  pay  was  the  chief  point  over  which  the  fight  was 
carried  on.  Then,  as  wages  rose,  and  the  cost  of 
living  became  less,  the  ground  was  shifted  and  in- 
dustrial conditions  were  uppermost.  But  for  all  that, 
the  origin  of  discontent  is  not  radically  different  ;  and 
it  matters  little  whether  the  quarrel  turns  upon, the 
rate  of  wages  or  the  conditions  of  employment.  These 
are  but  two  sides  to  the  same  bargain.  For  a  la^bouring 
man  may  say,  "  Whatever  work  you  set  me,  I  will  do 
it,  and  what  way  you  choose  ;  but  the  wage  is  not 
sufficient,  you  must  give  me  more,"  or  alternatively 
he  may  say,  "  I  will  be  satisfied  with  the  wage  you 
offer,  but  unless  the  character  of  the  work  is  changed, 
conditions  improved  and  hours  diminished,  I  will  do 
no  work  for  you."  It  is  all  the  same   whether  a  man 


148  NEW  FALLACIES  OF  MIDAS 

demands  a  larger  loaf  for  his  sixpence,  or  claims  to 
receive  the  sixpenny  loaf  for  fourpence  half-penny. 
So  for  Labour  there  is  but  one  fundamental  problem, 
one  grievance  for  ever  unremoved.  In  a  single  word. 
Labour  feels  itself  to  be  exploited.  It  says,  and  it  is 
never  tired  of  saying,  that  while  the  whole  burden  of 
production  falls  upon  its  own  shoulders,  the  profit 
of  production  goes  into  the  Capitalist's  purse.  Take 
the  case  of  a  Company  which  employs  women  to  turn 
out  ready-made  shirts.  The  seamstress'  wage  is  one 
shilling  a  day  ;  the  shareholders'  annual  dividend  is 
seventeen  per  cent.  That  is  an  actual  case ;  but 
perhaps  an  uncommon  one.  So  glaring  a  disproportion 
between  the  shares  of  Capital  and  Labour  may  be 
rare.  But  the  proportion  is  not  the  point.  Labour 
declares  that  in  every  case  the  profits  go  to  the  wrong 
man.  It  scorns  compromise  ;  and  it  revolts  from  any 
formula  by  which  a  just  proportion  might  be  fixed. 
Not  that  it  denies  the  value  of  Capital.  How  could  it  ? 
No  sane  man  would  pretend  that  crops  can  be  raised 
without  implements,  boots  or  bicycles  manufactured 
without  machines.  All  that  Labour  denies  is  the  right 
of  individuals  to  turn  Capital  to  profit.  One  man  owns 
a  factory,  a  field,  a  mine.  Other  men  till  that  field, 
operate  that  factory,  or  dig  that  mine  ;  yet  without 
raising  a  finger  to  the  work,  or,  at  most,  by  sitting  in 
his  office  and  ordering  his  foremen  and  managers  about, 
the  owner  by  sheer  right  of  possession  annexes  the 
chief  profits  of  their  toil.  If  the  price  of  corn  or  coal 
rises,  he  alone  reaps  the  benefit ;  those  who  grew  the 
corn  or  raised  the  coal  do  not  touch  a  penny  of  the 
surplus.  Labour's  doctrine  is  not  vague  ;  "  Wherever 
we  look,"  it  says,  "  we  see  the  sources  of  production  and 
the  means  of  production  held  as  the  monopoly  of  the 
few.  We  see  an  idle,  undeserving  class  (a  half- 
conscious  exaggeration)  battening  upon  an  outward 
privilege.     In  the  sphere  of  politics  oligarchic  monopoly 


THE  RISE  OF  LABOUR  149 

has  had  its  day  ;  democracy  and  equal  rights  have 
triumphed.  But  in  the  economic  sphere,  we  are  still 
bound  by  the  shackles  of  the  industrial  feudalism. 
We,  the  rightful  heirs  to  our  country's  rich  resources, 
are  still  shut  out  of  our  inheritance  ;  we  have  no  more 
share  in  the  family  wealth  than  if  we  were  the  family 
slaves.  For  this  there  is  but  one  remedy.  Until  the 
monopoly  is  destroyed,  and  until  the  means  and 
sources  of  production  are  taken  from  the  hands  of  the 
usurpers,  there  can  be  for  us  neither  compromise  nor 
peace." 

All  this  is,  of  course,  not  the  talk  of  the  apathetic, 
half  contented  millions  ;  but  of  the  more  progressive 
and  more  vocal  section  of  the  Labour  movement. 
But  if  it  seems  to  sound  the  tocsin  of  revolution,  it  is 
not  for  all  that  a  hare-brained  or  ill-considered  scheme. 
It  is  no  mere  catch-word  philosophy  which  neither 
means  what  it  says  nor  says  what  it  means.  For 
behind  the  inarticulate  mass,  who  find  in  some  ready- 
made  phrase  a  specious  remedy  for  their  distresses, 
behind  the  noisy  blusterers,  who  spout  exag- 
gerated half-truths  in  mass  meetings  or  at  street 
corners,  there  are  plenty  of  hard  heads  and  busy 
brains  at  work.  There  are  men  who  read,  discuss, 
and  think  for  themselves  ;  and  out  of  their  thoughts 
they  weave  long-sighted  altruistic  schemes  for  the 
regeneration  of  the  world.  They  see  past  the  petty 
!  squabbles  which  concern  a  mere  rise  in  wages,  or  a 
point  of  work-shop  discipline  ;  they  look  to  the 
ultimate  goal  towards  which  they  conceive  organised 
labour  to  be  moving  ;  they  see  the  irresistible  force 
j  which  the  masses,  did  they  but  present  a  united  front, 
I  might  wield  ;  and  first  and  foremost  they  are  concerned 
with  the  purpose  to  which  that  force  may  one  fine  day 
be  put.  On  one  point  they  are  generally  agreed  ; 
j  by  fair  means  or  foul  the  sources  and  the  means  of 
'    production   must  be  taken  from  the  Capitalist.     But 


150  NEW  FALLACIES  OF  MIDAS 

(happily  for  the  Capitalist)  they  have  fallen  out  among 
themselves  over  the  prospective  division  of  the  spoils  ; 
they  cannot  agree  to  whom  the  sources  of  production 
should  properly  belong.  One  school  contends  that 
they  are  the  rightful  heritage  of  the  community  at 
large,  and  that  the  ownership  of  them  should  be  vested 
in  the  State.  These  are  the  Socialist  School,  or  to 
give  them  a  stricter  and  less  abused  title,  the  Collec- 
tivists.  The  rival  school  declares  that  the  worker's 
claim  is  supreme,  and  that  they  must  own  that  which 
derives  its  value  from  their  labour  alone.  "  The  mine 
for  the  miners,  the  factory  for  the  factory  hands  "  is 
the  cry  of  those  who  for  want  of  an  English  name 
have  borrowed  one  from  France  and  are  called  the 
Syndicalists. 

The  Socialists  are  first  in  the  field.  The  bias  towards 
political  action,  which  was  the  mark  of  the  Newer 
Unionism,  naturally  lent  itself  to  the  Collectivist 
solution.  If  the  best  remedy  for  industrial  troubles 
is  the  intervention  of  the  State,  complete  reform  can 
only  come  when  the  State  has  assumed  complete 
control.  In  the  early  nineties  the  so-called  Inde- 
pendent Labour  Party  headed  the  movement  towards 
the  socialist  ideal.  At  the  Trade  Union  Congress  held 
at  Norwich  in  1894  a  resolution  was  put  forward  to  the 
effect  that  "  it  was  essential  to  the  maintenance  of 
British  industries  to  nationalise  the  land,  the  mines, 
minerals  and  royalty  rents."  Mr.  Keir  Hardie  pro- 
posed an  amendment  to  omit  the  words,  "  mines, 
minerals,  and  royalty  rents,"  and  to  substitute  "  the 
whole  means  of  production,  distribution  and  exchange." 
Here  was  the  socialist  gospel  in  a  nutshell.  The 
amendment  was  supported  by  John  Burns  and  Tom 
Mann,  and  was  carried  by  a  large  majority.  Neverthe- 
less, there  were  strong  dissentients  among  Labour. 
The  representatives  of  the  Old  Unions  were  still  a 
vigorous  and  sturdy  lot,   placing  more  faith  in  indi- 


THE  RISE  OF  LABOUR  151 

vidual  effort,  self  reliance  and  self-help  than  in  all  the 
political  nostrums  of  the  Socialists.  They  maintained 
that  such  vague  recommendations  were  useless,  as 
being  outside  the  range  of  all  practical  application. 
They  threatened  to  secede  from  the  Congress,  and 
their  resistance  so  far  triumphed  that  Socialism  has 
gradually  fallen  into  the  background  and  such  nebulous 
proposals  as  Keir  Hardie's  have  ceased  to  appear  on 
the  agenda  of  the  Congress.  The  Socialist  Members  at 
Westminster  remained  a  handful  of  discredited  cranks  ; 
few  Hsten  to  them  now  ;  and,  although  during  the  war, 
the  nationalisation  of  the  Railways  and  the  Mines — 
that  consummation  once  so  eagerly  awaited — has  been 
put  to  the  test,  it  is  doubtful  whether  the  result  of  the 
experiment  will  make  men  quite  so  eager  for  its 
repetition  in  the  future. 

The  fact  is  that  the  spell  of  Socialism  was  broken; 
the  old  leadership  had  lost  its  hold  ;  the  rank  and  file 
were  tired  of  their  propaganda,  as  of  a  too  familiar 
tune  ;  and  it  needed  something  new  to  catch  the  ear. 
At  the  same  time  a  new  restlessness  was  stirring  in  the 
body  of  Labour.  The  last  few  years  before  the  out- 
break of  the  war  were  years  of  bitter  fighting  in  the 
industrial  world.  There  were  large  strikes  in  plenty, 
and  threats  of  even  larger.*  The  men  were  spoiling 
for  a  fight  on  whatever  issue,  The  employees  of  the 
North-Eastcrn  Railway  went  out  because  a  guard, 
who  was  accused  of  being  drunk,  had  been  penalised 
by  the  Company  oiftcials.  Prices  had  meanwhile  been 
rising  steadily  for  ten  years,  and  were  rising  still. 
Wages,  which  shortly  before  had  been  tolerable,  were 
no  longer  adequate  to  meet  the  rise.  A  long  trade 
boom  had  been  in  progress,  yet  the  workers  had  them- 

*  On  a  ten  years'  average  previous  to  191 1  the  annual  number  of 
strikes  was  463,  the  number  of  persons  aflected  221,058,  the  number  of 
days  lost  in  aggregate  about  4  million.  In  iqi2,  therevvere  821  strikes, 
affecting  1,437,032  persons  ;  and  the  days  lost  reached  the  astounding 
total  of  40,346,400. 

11 


152  NEW  FALLACIES  OF  MIDAS 

selves  reaped  little  solid  benefit  therefrom.  Agitators 
were  busy  with  their  fiery  exhortations  ;  let  Labour 
arise  like  a  giant  refreshed,  and  no  power  on  earth 
could  resist  its  onslaught.  There  was,  in  fine,  a  new 
spirit  abroad  in  the  land  ;  and  it  needed  only  a  name 
and  a  theory  to  launch  a  new  crusade.  Both  name  and 
theory  were  supplied  by  Syndicalism. 

Syndicalism  came  from  France,  where  already  in 
1912  it  was  a  sturdy  growth.  To  be  exact,  the  name 
"  Syndicat  "  itself  signifies  no  more  than  the  English 
"  Trade  Union  "  ;  but  the  sense  has  been  narrowed 
down  and  crystallised  to  fit  a  particular  theory. 
According  to  this  theory,  bold  and  decisive  as  French 
theories  are  wont  to  be,  the  Syndicalist  holds  that 
nothing  matters  except  business  of  production,  and 
that  nobody  counts  except  the  producer.  From  this 
it  follows  that  the  employer  or  capitalist  does  not  count 
at  all  ;  war  upon  them  is  a  duty  war  conducted  without 
truce  and  without  honour,  until  the  enemy  has  been 
destroyed.  Secondly  it  follows  that  the  consuming 
public  other  than  the  organising  producers,  does  not 
count ;  and  therefore  the  State,  or  rather  the  Govern- 
ment which  represents  the  whole  community  and 
defends  the  interests  of  every  class  alike,  is  equally 
an  obstacle  in  the  Syndicalist's  path.  Whether  it 
happens  to  intervene  on  the  worker's  behalf  or  against 
them,  it  is  an  excresence  dealing,  as  they  hold,  with 
irrelevant  issues  and  diverting  men's  attention  from 
the  one  fundamental  problem  of  life,  production. 
"  Men's  country,"  says  the  Syndicalist,  "  is  their  own 
belly."  The  State  and  all  that  is  bound  up  with  its 
patriotism  and  nationality  and  central  government 
must  simply  cease  to  exist.  From  these  two  doctrines 
put  together  the  Syndicalist  concludes  that  property 
must  belong  neither  to  individuals  nor  to  the  State, 
but  must  pass  into  the  hands-of  the  Producer's  Unions. 
It  is  a  fanciful  ideal ;  it  cannot  at  any  point  be  pressed 


THE  RISE  OF  LABOUR  I53 

to  a  logical  conclusion.  "  The  Mine  for  the  Miners  " 
is  a  fine  sounding  motto  ;  but  then  comes  the  fair, 
though  cynical  retort,  "  the  Patients  for  the  Doctor  "  ; 
and  the  thing  appears  ridiculous.  Moreover,  how  such 
a  reversal  of  our  present  social  structure  is  to  be 
accompHshed,  is  not  defined.  Somehow  or  other  the 
day  will  come  like  a  thief  in  the  night ;  a  general 
strike,  a  revolution,  who  knows  what  ?  And  in  the 
meantime  in  blind  but  trustful  faith,  men  must  fight 
on  preparing  ceaselessly,  winning  here  a  little,  there  a 
little,  by  strike  upon  strike,  and  blow  upon  blow, 
pressing  the  enemy  "  sans  treve  et  sans  reldche." 

Such  a  theory  may  suit  the  intellectual  and  ardent 
temper  of  the  French  ;  but  to  most  Englishmen,  as 
stated  in  its  extreme  form,  it  sounds  like  idle  talk. 
They  have  not  that  faith  in  abstract  ideals  which 
Frenchmen  have  ;  they  like  to  see  something  for  their 
money,  or  at  least  some  tangible  pledge  of  definite 
results.  Nevertheless  Syndicalism  is  a  name  which 
has  caught  on.  In  its  saner  aspects,  at  any  rate,  it 
seems  to  promise  an  alternative  to  Socialism,  and  is 
free  from  Socialism's  most  radical  defects.  The 
overthrow  of  Capitalist  Society,  which  would  leave  the 
control  of  industry  in  the  hands  of  the  Trades  Unions, 
and  would  bring  the  whole  profit  of  production  into  the 
hands  of  the  producers — that  seems  to  many  an  ideal 
worth  fighting  for,  and  an  ideal  capable  perhaps  of 
none  too  distant  realisation.  Already  before  the  war, 
Syndicalism  had  taken  some  hold  upon  the  minds 
of  progressive  Unions.  But  during  four  years  of 
war  its  growth  has  assumed  •  more  formidable  pro- 
portions. The  strike  which  in  the  past  had  been 
regarded  merely  as  an  attack  on  the  employer,  im- 
mediately became  overt  menace  to  the  State,  which 
was  now  directly  or  indirectly  the  employer  of  nine- 
tenths  of  the  working  population.  Successive 
Governments  were  not  strong   enough   or  courageous 


154  NEW  FALLACIES  OF  MIDAS 

enough  to  meet  the  threats  with  stern  suppression  ;  and 
point  after  point  was  conceded  to  the  demands  of 
Labour.  So  Labour  finding  itself  victorious  at  all 
points,  and  that  almost  without  a  struggle,  began  to 
realise  its  strength.  A  spirit  of  unrest  and  defiance 
spread  in  the  storm  centres  of  industry,  the  cities  of 
Northern  England  and  South  Scotland ;  vague 
revolutionary  theories  which  previously  had  been 
confined  to  agitators  and  rare  enthusiasts  now  became 
popular  catch-words  ;  and  chief  among  them  was  the 
battle  cry  of  Syndicalism  ; — the  means  and  sources 
of  production  for  the  producers.  Syndicalism  is  not 
yet  fully  fledged  ;  it  has  still  to  develop  a  definite 
programme  and  formulate  its  policy  of  action.  Never- 
theless, in  its  more  fanciful  exaggerated  form,  it  is  a 
menace  to  the  Capitalist  which  the  Capitalist  dare  no 
longer  ignore.  More  than  that,  it  is  a  menace  to  the 
stability  of  our  whole  social  organism,  which  since 
we  have  seen  the  unhappy  chaos  of  the  Russian 
Revolution,  has  assumed  a  more  real  and  formidable 
shape.  Sooner  or  later  (and  perhaps  very  soon),  with 
it  or  with  Socialism  England  will  have  to  reckon.  Both 
seem  to  offer  a  solution  to  a  situation  which  cannot 
be  permanent,  which  is  already  strained  to  breaking 
point,  and  which  at  any  mom.ent  may  become  in- 
tolerable. In  industrial  warfare  a  temporary  truce 
may  be  patched  up  ;  some  balance  of  advantage  may 
be  struck.  But  if  Labour  is  resolved  upon  a  fight  to  a 
finish,  then  a  fight  to  a  finish  there  must  be.  Let  us 
know  now  what  Labour  stands  for ;  what  is  its 
concrete  policy.  If  it  hopes  to  win  the  fight,  it  is  none 
too  early  to  declare  its  terms,  and  to  state  what  use  it 
will  make  of  victory  when  victory  is  won.  For  this  is 
no  longer  a  philosopher's  question,  no  matter  of  passing 
academic  resolutions  or  painting  imaginary  Utopias. 
Socialism,-'through  the  centralising  influence  of  war's 
necessities,  has  already  become  a  part  of  our  political 


THE  RISE  OF  LABOUR  155 

structure.  Syndicalism  is  debated  in  a  hundred 
towns,  vaguely  perhaps,  but  none  the  less  in  deadly 
earnest.  Whether  either  or  neither  will  eventually 
triumph,  the  future  alone  will  show  ;  but  it  is  in  the 
present  (and  that  without  delay)  that  the  cost  of  both 
must  be  counted. 


/ 


i 


Chapter  XIII 

SOCIALISM 

(i.) 
Socialism  to  the  comfortable  and  ignorant  is  a  word 

covering  (thought  not  excusing)  a  multitude  of  sins. 
It  is  used  and  misused  in  a  hundred  different  ways,  now 
for  one  thing,  now  for  another,  but  always  as  signifying 
something  which,  if  not  positively  immoral,  is  at  least 
to  be  regarded  with  ridicule  or  suspicion.  At  one 
time,  it  is  a  scheme  for  dividing  the  world's  wealth  into 
an  infinite  number  of  equal  parts,  to  be  distributed, 
like  bread-tickets,  among  an  infinite  number  of 
individuals.  At  another  time  it  is  simply  a  euphemism 
for  wholesale  robbery,  whereby  the  rich  man's  money 
is  to  be  handed  over  to  the  poor.  Sometimes  it  is 
used  in  sorrowful  contempt  for  any  man  whose  sym- 
pathies are  touched  by  the  distresses  of  the  "  lower 
orders."  Even  the  disciples  of  Socialism  themselves 
are  in  no  very  strict  agreement.  Communists,  Collect- 
ivists,  Comtists,  and  Revolutionaries,  are  all  gathered 
under  the  shelter  of  its  cosmopolitan  creed.  The  very 
course  of  the  movement  is  as  diverse  as  the  history  of 
religious  sects.  It  pullulates  like  the  monster  of  a 
hundred  heads  ;  no  sooner  is  one  destroyed  by  the 
sharp  sword  of  logic  or  by  the  slow  strangulation  of 
poHtical  events,  than  two  others  spring  into  its  place. 
For,  truth  to  tell.  Socialism  is  not  so  much  a  set 
system,  as  an  enthusiasm  and  an  ideal,  and  like  the 
ideals  of  religion,  it  finds  a  new  formula  according  to 
the  temper  of  the  age,  and  the  nature  of  the  soil  in 
which  it  grows.  In  its  widest  sense,  then,  Socialism 
is  simply  a  belief  that  all  men  are  brothers  and  should 

156 


SOCIALISM  157 

behave  as  such.  It  took  just  on  eighteen  hundred 
years  of  Christianity,  before  men  thought  of  asserting 
this  principle  in  any  practical  manner  ;  and  when  they 
did,  they  signaHsed  their  access  of  brotherly  zeal  by 
establishing  a  military  despotism  and  cutting  off  a 
large  number  of  their  brothers'  heads.  But  though 
the  banner  of  the  Revolution  was  inscribed  with  the 
words  Liberty,  Equality  and  Fraternity,  and  though 
Rousseau  preached  the  ultimate  rightness  of  pure 
Democracy,  it  is  to  the  aftermath  of  the  Revolution 
rather  than  to  its  actual  course,  that  we  shall  look  for 
any  definite  scheme  of  Socialistic  practice.  With  two 
French  writers  in  particular,  Fourier  and  Saint  Simon, 
the  theory  began  to  crystallise.  Both  were  dreamers. 
Utopians,  men  of  a  naive  and  optimistic  philanthropy. 
In  the  Gospel  according  to  Fourier  salvation  was  to  be 
found  through  a  new  form  of  political  unit.  By  living 
together  in  small  groups  or  communes  (counting  under 
two  thousand  members),  men  could,  he  thought, 
improve  their  lot,  chiefly  through  a  new  harmony  of 
organisation  which  would  supplant  the  wasteful 
discord  of  competition.  Fourier  did  not  himself 
propose  to  suppress  all  inequality  arising  from  private 
ownership  ;  but  more  thorough-going  Communists 
have  not  shrunk  from  asserting  that  such  a  society 
should  live  as  the  family  lives,  each  member,  that  is, 
giving  his  work  for  the  good  of  all,  and  receiving  each 
according  to  his  need.  No  doubt  it  is  a  beautiful 
ideal  ;  but  to  imagine  that  under  such  a  system  the 
individual  would  set  a  voluntary  limit  upon  his 
appetite,  requires  an  almost  fanatical  belief  in  the 
goodness  of  human  nature.  And,  though,  in  point  of 
fact,  communities  much  on  these  lines  have  actually 
existed  and  even  flourished  in  America,  their  success 
has  only  been  achieved  by  the  strictest  enforcement  of 
discipline,  and  under  the  spiritual  stimulus  of  strong 
religious  enthusiasm. 


158  NEW  FALLACIES  OF  MIDAS 

Saint-Simon's  proposals  were  more  plausible  ;  and, 
although  in  his  own  day  the  man  himself  remained  a 
prophet  without  honour,  yet  the  school  of  thought 
which  he  founded  was  long  popular  in  France.  Instead 
of  proposing  to  distribute  the  wealth  of  the  community 
according  to  the  individual's  own  estimate  of  what 
he  wanted,  Saint  Simonists  declared  that  each  should 
receive  according  to  the  measure  of  his  deserts. 
Desert  was  to  be  judged  solely  by  the  function  which 
the  man  discharged,  and  all  forms  of  inherited  wealth 
were  to  be  ruthlessly  abolished.  Saint  Simonism,  in 
fact,  so  far  from  asserting  the  complete  equality  of  men, 
made  rather  for  an  aristocracy  of  merit  and  is,  as 
will  be  seen,  not  far  removed  from  the  Collectivist 
ideal. 

But  while  these  two  Frenchmen  in  the  quiet 
seclusion  of  their  studies  were  building  their  quaint 
castles  in  the  air,  there  was  born  a  man  of  different 
genius  and  of  other  race.  Karl  Marx,  the  young 
German  Socialist,  was  a  curious  mixture  of  philosopher 
and  prophet ;  with  a  scientific  thoroughness  and 
astounding  breadth  of  vision,  he  took  a  wide  historical 
view  of  the  State's  development,  by  which  he  linked  up 
the  Socialist  future  with  the  Capitalist  present ; 
Socialism,  in  short,  was  not  for  him  a  subject  for  vague 
speculation  or  philanthropic  experiment ;  it  was  an 
essential  and  inevitable  phase  in  which  the  economic 
evolution  of  Society  must  one  day  culminate.  In 
his  master-work.  Das  Kapital,  he  showed  how  the 
wealth  of  industrial  magnates,  gathering  as  it  went, 
both  strength  and  size  like  some  vast  snowball,  was 
destined  to  crush  the  working  class  beneath  its  weight, 
how,  as  the  rich  became  momentarily  richer,  the  poor 
became  proportionately  poorer  ;  and  how,  one  fine 
day  when  the  position  should  become  intolerable,  the 
masses  would  arise  with  one  accord  and  set  the  world 
to  rights. 


SOCIALISM  .     159 

Marx's  forecast  has  been  demonstrably  untrue  to 
fact ;  even  if  the  rich  have  become  richer  the  poor  have 
certainly  not  become  poorer.  But  (whether  his 
theories  are  false  or  true)  Marx  does  not  stand  or  fall 
a  philosopher  alone  ;  '  for  he  was  also  a  leader  of  men. 
Though  he  professed  to  be  no  revolutionary  firebrand, 
he  set  himself  to  awaken  the  working  classes  to  a 
consciousness  of  their  pUght.  Driven  out  from 
Germany  an  exile  (for  he  took  part  in  the  Revolution 
of  '48)  he  carried  the  message  of  class  warfare  to 
Paris  and  to  London.  From-  here  he  issued  his  famous 
summons  to  the  world,  "  Workers  of  all  lands,  unite  !  " 
and  his  enthusiasm  bore  fruit  in  the  foundation  of  the 
International  Working-men's  Association.  The"  Inter- 
national "  is  a  league  wherein  all  differences  of  creed 
or  country  are  sunk  in  the  common  fight  against 
oppression.  So,  by  a  curious  irony  of  fate,  it  was  a 
German  who  first  estabUshed  the  one  outward  and 
visible  expression  of  the  universal  brotherhood  of 
man.  This  is  Marx's  chief  claim  to  greatness.  His 
name  and  theory  became  words  for  Socialists  to 
conjure  with  ;  and  he  gave  to  Sociahstic  agitation 
an  impetus  and  a  solidarity  which  have  made  it  a  living 
force  in  Europe,  and  which  in  our  own  day  has  been 
reborn  in  the  proposal  for  a  Socialist  conference  at 
Stockholm. 

It  was  not,  however,  till  Marx  himself  died  and 
had  been  buried  in  Highgate  cemetery,  that  the  fruits 
of  his  work  began  to  be  plainly  visible  in  England. 
In  the  thirties  it  is  true.  Chartism  had  made  its  protest 
against  industrial  tyranny,  and  had  even  formulated 
a  remedy  in  its  democratic  "  Charter."  About  the 
same  time  Robert  Owen  had  thrown  out  an  ideal  and 
had  made  experiments  in  his  own  Lanark  Mills. 
Then  in  the  early  eighties  the  revelations  of  Henry 
George  in  his  "  Progress  and  Poverty  "  shocked  men 
into  action,   and  set  them  thinking  over  his  violent 


I 


i6o  NEW  FALLACIES  OF  MIDAS 

denunciations  of  Rent  as  the  root  of  every  evil. 
Soon  after  Mr.  Hyndman  and  certain  disciples  of 
Marx  formed  in  London  the  Social  Democratic 
Federation.  From  these  a  small  band  broke  off 
calling  itself  the  Socialist  League  and  counting  among 
its  members  William  Morris,  who  to  the  consternation 
of  his  artistic  friends  took  to  attending  Socialist  Clubs 
and  even  addressing  crowds  at  the  street  corners. 
Thus  the  English  movement  was  definitely  launched  ; 
its  subsequent  development  has  been  a  curious  and 
characteristic  blend  of  high  souled  idealism  (less 
visionary  than  the  French)  and  political  agitation 
(more  practical  than  Marx).  On  the  one  hand,  we  have 
had  the  Fabian  Society,  seeking  by  pamphlets  and 
debates  to  educate  the  public  mind  in  the  science  of 
economic  health ;  while  the  Independent  Labour 
Party,  with  a  leg  as  it  were  on  both  stools,  strives  to 
uphold  in  Parliament  the  pure  flame  of  Socialistic 
theory.  On  the  other  hand,  we  have  the  Labour 
Party  proper,  an  unholy  alliance,  as  some  think,  between 
philosophic  Socialism  and  militant  Trades  Unionism, 
but  an  alliance  which  has  at  least  succeeded  in  effecting 
many  measures  of  practical  reform.  This  has  not 
been  accomplished  without  some  sacrifice  of  principle 
and  some  contamination  with  Liberal  policies.  But 
indeed.  Socialism  is  so  vague  and  many-sided  an  ideal 
that  it  may  well  be  what  you  choose  to  make  of  it, 
according  as  you  try  to  fix  your  eyes  on  the  head  hidden 
among  the  clouds  or  on  the  feet  with  which  it  still 
keeps  touch  with  material  earth.  As  expounded  by 
the  former  Leader  of  the  Labour  Party,  Mr.  Ramsay 
Macdonald,  it  stands  for  every  blessing,  perfection,  and 
privilege  which  this  world  has  ever  known  or  ever  can 
know.  It  alone  can  bring  perfect  freedom  to  the 
individual ;  it  alone  can  offer  him  such  a  form  of 
private  property  as  shall  enable  him  to  a  true  realisation 
of  himself ;    it  alone  knows  how  to  organise  industry, 


SOCIALISM  i6i 

cultivate  genius,  encourage  art.  In  a  word  Socialism 
is  a  sort  of  Paradise  come  to  earth — a  state  of  being 
fit  only  for  a  celestial  choir  of  angels.  Now  we  all 
want  liberty,  art,  culture  and  efficiency  ;  what  we  do 
not  know  is  how  to  get  them.  The  Higher  Social- 
ism may  well  be  matter  for  pious  aspiration  ;  but 
it  does  not  help  us  much  in  the  serious  discussion 
of  present-day  problems.  At  one  point  however 
Socialism  has  come  forward  with  a  practical  suggestion. 
When  at  the  Norwich  Congress  Mr.  Keir  Hardie 
proposed  the  nationalisation  of  "  the  whole  means  of 
production,  distribution  and  exchange"  he  was  in  a 
strict  sense  talking  as  a  CoUectivist,  but  though  this 
programme  would  satisfy  but  one  side  of  the  Socialist 
policy  only,  it  is  by  so  much  the  most  tangible  and 
practical  side  that  it  may  rightly  be  regarded  as  the 
central  plank  in  the  Socialist  platform.  Here  at  any 
rate  we  are  on  solid  ground. 

(ii.) 

When  a  man  complains  of  the  profit  which  a  mine- 
owner  makes  out  of  his  mine,  it  is  plain  that  he  may 
have  two  motives  for  annoyance.  He  may  be 
grumbling  because  he  is  a  miner  and  his  wages  are  too 
low,  or  he  may  be  grumbling  because  he  is  a  house- 
holder and  pays  too  much  for  coal.  Socialism,  the 
all  embracing,  will  sympathise  with  both  grievances  ; 
for  it  is  concerned  with  the  interests  of  miner  and 
householder  alike.  Collectivism  concerns  itself  entirely 
with  the  latter,  with  the  consumer  not  with  the 
producer.  It  purposes  to  take  the  mine  from 
the  Capitalist  and  entrust  it  to  the  keeping  of  the 
State.  The  State  representing  the  citizens  at  large 
and  responsible  to  the  whole  community,  not  to  a  single 
class,  will  study  the  public  convenience,  and  furnish 
forth  the  coal  for  the  consumer's  benefit ;  and  no  doubt 
the  consumer  will  benefit  handsomely  thereby.  There 


i62  NEW  FALLACIES  OF  MIDAS 

being  no  longer  a  mine-owner  to  take  his  toll  of  profit, 
the  State  can  sell  the  coal  at  cost  price  ;   or  if  it  makes 
a  profit  on  the  business,  the  surplus  can  be  turned  to 
pubHc  advantage  some  other  way.     The  whole  scheme 
is  delightfully  simple.     There  can  be  no  doubt  that  it 
would   work  ;    it   has   already   been  applied    to  many 
branches  of  production.     The  Postal  service  is  run  by 
the  State  ;    so  is  the  Telephone  ;    and  in  France  some 
portions   of   the    Railway   System.     We   can   see   the 
same  principle  at  work  on  a  small   scale    elsewhere  ; 
in  many  towns  the  municipal    authorities    own    and 
control   the  Gasworks,   Electric  Lighting,   Tramways, 
and  even  the    Milk    supply.      If  we  can    nationaUse 
the  Railways,  we  can  nationalise  the  Mines  ;    if  the 
Mines,  then  the  Land  also  ;    and  that  done,  it  is  an 
easy  and  tempting  progress  to  the  nationaHsation  of 
factories,   shops,   shipping,   theatres,   houses,   in  short 
everything.     The  State,  emulating  the  comprehensive 
efficiency  of  some  great  store,  will  undertake  to  supply 
the  citizen's  every  want,  from  the  lease  of  a  country 
mansion  to  the  purchase  of  a  twopenny  toy.     Nor  will 
such  a  State  neglect  to  round  the  system  off  by  organ- 
ising the  life  and   habits  of  its  members  ;    from   com- 
pulsory insurance  and  compulsory    education    it    will 
pass   to   compulsory    temperance,    compulsory     work, 
and,  as  like  as  not,  compulsory  eugenics.     For  it  is  to 
the  State's  interest  (that  is  the  consumer's)  to  secure 
a    healthy,    industrious,    temperate    set    of    workers. 
Organisation   is    a   passion    which   grows   with   habit. 
Once  started  the  Collectivist  State  cannot  easily  draw 
back  ;    and  it  will  not  leave  much  to  Providence  or 
chance. 

There  is  not  space  here  to  discuss  at  length  the 
methods  by  which  the  State  may  displace  the  owners, 
nor  to  pass  judgment  upon  the  ethics  of  expropriation. 
First,  there  is  the  open  method.  It  may  take  all  at 
a  blow  by  forthright    confiscation  ;    or  filch  them  by 


SOCIALISM  163 

the  more  insidious  but  equally  obvious  process  of 
oppressive  taxes.  In  either  case  it  will  take  its  stand 
upon  the  plea  of  the  common  good.  That  is  the  excuse 
which  served  to  recommend  the  confiscation  of  the 
monasteries,  and  the  disendowment  of  the  Welsh 
Established  Church.  The  State,  Socialists  say,  is 
greater  than  the  Individual,  who  owes  everything  he 
has  to  the  state's  bounty  and  protection.  Therefore, 
say  the  Socialists,  the  State  can  do  what  it  wills  with 
its  own.  They  will  argue,  for  instance,  that  the  high 
value  of  your  land  in  Hampstead  is  derived  from  the 
presence  of  the  people  who  rent  it,  and  that  therefore — 
a  very  singular  contention — the  People  with  a  large  P 
are  entitled  to  annex  your  profits,  because  it  is  they 
have  caused  it  and  not  you.  It  is  on  this  somewhat 
J  dubious  pretext  that  many  are  eager  to-day  to  tax  the 
I  landowner  out  of  existence — but  this  is  a  flimsy 
subterfuge  for  evading  moral  issues.  Such  a  plea  is  no 
better  than  the  Spartan's  who  was  wont  to  justify 
picking  and  stealing  because  he  had  previously  invented 
an  hypothesis  that  private  property  should  not  exist. 
But  the  state  itself  happens  to  depend  upon  a  directly 
contrary  hypothesis  ;  namely,  that  individuals  are 
bound  to  respect  their  neighbour's  rights  ;  and  the  state 
if  it  defies  the  moral  law  itself,  will  be  cutting  the 
ground  from  under  its  own  feet.  So  in  all  likelihood  it 
I  will  prefer  to  adopt  a  show  of  legality  and  buy  the 
private  owners  out.  This  is  the  scheme  which  now 
finds  favour  with  the  majority  of  modern  Socialists. 
For  precedent  they  are  able  to  quote  such  a  tran- 
saction as  the  buying  out  by  Government  of  the  Private 
Telephone  Companies  in  1907  :  and  that  the  scheme 
would  in  its  initial  stages  be  workable  enough,  we 
need  not  doubt.  The  first  step  would  be  to  find  the 
money  for  the  purchase.  So  large  a  sum  could  hardly 
be  raised  by  ordinary  taxation,  but  a  public  loan  could 
easily  be  issued  :    and  this  would  be  done.     As,  how- 


i64  NEW  FALLACIES  OF  MIDAS 

ever  it  is  probable  that  the  old  proprietors,  with  the 
purchase  money  in  their  hands,  would  largely  invest 
it  in  this  loan,  the  net  result  would  be  that  they  would 
have  exchanged  their  old  holdings  for  Government 
stock  ;  and  that  instead  of  their  large  and  perhaps 
precarious  profits,  they  would  now  exact,  as  creditors 
of  the  nation,  a  fixed  return  of  interest  from  the  State. 
The  second  step  would  therefore  be  to  relieve  the 
exchequer  of  this  incubus  :  a  sinking  fund  would  be 
formed  out  of  annual  revenue,  whereby  the  loan  might 
be  paid  off.  So  far,  so  good.  This  plan  also  would 
work  smoothly  enough  at  first  :  so  long  as  the  capitalist 
could  find  fresh  uses  for  the  money  so  refunded  to  him, 
he  would  have  no  just  cause  for  complaint.  But,  if  the 
State  were  able  (a  contingency  we  well  may  doubt) 
to  extend  this  legitimate  method  of  expropriation  to 
all  forms  of  property,  then  the  game  would  be  up,  for 
in  that  case  it  must  come  to  confiscation  in  the  end. 
The  private  owner  may  be  willing  for  a  time  to  accept 
whatever  price  the  State  may  offer,  but  only  so  long 
as  he  can  find  means  to  dispose  of  his  capital  elsewhere. 
Once  he  sees  every  channel  of  investment  threatened, 
it  will  be  futile  to  accept  banknotes  which  he  can  turn 
to  no  new  purpose.  For  though  the  sum  which  the 
state  pays  him  money  down,  might  well  keep  him  in 
clover  for  his  life-time,  he  will  not  be  able  to  trade  with 
it.  Not  only  will  he  have  lost  his  peculiar  privilege 
of  "  profiteering,"  but  he  will  not  be  able  to  increase  his 
capital  nor  to  bequeath  any  permanent  subsistence  to 
his  children  ;  Capitalists,  seeing  the  sources  of  their 
gains  in  jeopardy,  will  raise  an  outcry  like  the  silver- 
smiths 01  Ephesus  ;  and  will  oppose  the  further  pro- 
gress of  reform  with  all  their  power.  Voluntary  sale 
will  cease  ;  and  their  goods  must  needs  be  taken  from 
them  by  force,  as  though  from  criminals.  It  is 
arguable,  I  suppose,  that  it  is  a  crime  against  Society 
to  be  rich.     At  any  rate  it  is  easy'for  the  Socialist  to 


SOCIALISM  165 

say  that  Capitalists  have  done  nothing  to  deserve 
their  fortune.  But  it  is  hardly  consistent  to  stop 
there ;  if  Capitalists'  brains  are  not  deserving  of 
reward,  Socialists'  brains  are  no  more  so.  At  this 
rate,  there  can  be  no  reason  under  heaven  why  the 
Socialist  State  should  distinguish  between  the  services 
of  its  citizens,  nor  why  it  should  pay  its  Prime  Minister 
more  highly  than  its  sweeps.  Let  us  forthwith 
institute  the  commune  and  have  done  with  this  talk 
of  deserts  and  rewards  ;  under  that  delightful  system, 
everybody  would  presumably  be  happy,  free  to  do 
what  he  likes,  and  to  get  what  he  wants,  and  there  could 
be  no  reason  thenceforward  to  grudge  a  neighbour 
any  mortal  thing — except  his  appetite. 

It  is  usually  considered  bad  ethics,  to  condone  the 
immoral  means  in  anticipation  of  the  moral  end.  Yet 
we  cannot  ignore  that  in  the  larger  movements  of 
history  this  obnoxious  principle  has  stood  justified 
by  its  results.  The  overthrow  of  tyrants,  and 
oligarchies,  the  emancipation  of  oppressed  peoples, 
even  the  beneficent  supremacy  of  great  empires, 
these  have  not  been  accomplished  without  worse  things 
than  robbery.  If  Socialism  can  make  good  one  half 
of  the  beautiful  things  that  it  promises,  we  might  well 
be  glad  to  draw  a  veil  over  its  less  lovely  features. 
It  is  indeed  an  alluring  picture,  this  state  of  co-opera- 
tion and  brotherly  love.  It  has  much  to  offer  besides 
the  abolition  of  Capitalists.  At  one  stroke  we  should  be 
rid  not  merely  of  profiteering,  but  of  the  competition 
itself  and  all  its  attendant  curses,  the  whole  meaning- 
less struggle  to  outbid  or  undersell,  the  wasteful,  ugly 
habit  of  advertisement,  the  frauds,  and  duplicity  of 
commerce  ;  and  above  all  we  should  be  rid  of  the 
unnecessary  duplication  of  single  functions.  All  this 
would  disappear  under  the  directions  of  a  wise  and 
centralised  control.  We  should  no  longer  have 
"  twenty  milk-carts  rattling  down  the  street  where  one 


i66  NEW  FALLACIES  OF  MIDAS 

would  do."  Railway  companies  would  not  run  their 
trains  to  miss  a  rival  company's  connections ;  nor 
would  traders  waste  their  energies  to  encompass  the 
ruin  of  another  firm.  Already  in  the  operation  of  the 
great  trusts  we  can  see  something  of  the  economy 
which  unity  of  organisation  could  effect  both  in  effort 
and  expense. 

But  Socialism  stands  for  much  more  than  a  good 
business  proposition.  Far  more  than  mechanical 
efficiency,  it  counts  upon  a  spiritual  change.  For 
co-operation  brings  out  all  that  is  best  in  man  ;  set 
free  from  the  demoralising  pursuit  of  personal 
aggrandisement  he  would  be  uplifted  by  the  conscious 
effort  to  serve  the  common  good.  Altruism  and  honest 
emulation  would  supplant  the  old  jealousies  ;  and 
where  no  bar  of  class  or  privilege  survived,  each  would 
find  a  field  open  to  his  talents  and  a  new  happiness  of 
self-realisation.  It  is  not  for  nothing  that  many  have 
seen  in  Socialism  the  true  goal  of  Christianity. 

Now  we  cannot  pry  into  the  future  ;  shown  such  a 
picture  of  posterity  we  cannot  point  to  this  or  that 
and  say  for  certain  "It  will  "  or  "it  will  not  be  so." 
Nevertheless  taking  human  nature  for  what  it  is,  we 
may  safely  cast  a  doubt  on  some  details  of  the  picture. 
For  you  may  set  the  whole  social  fabric  topsy-turvey, 
but  man  himself  will  not  quickly  change.  He  will  still 
have  appetites  ;  he  will  still  be  found  discontented  with 
what  he  has  and  eager  to  get  more.  Therefore,  since 
the  socialistic  state  must  still  reward  the  services  of 
its  members,  must  still,  that  is,  pay  wages,  unregenerate 
man  will  do  his  best  to  get  the  most  he  can  out  of  the 
State.  At  first  perhaps  he  will  present  his  demands 
to  the  authorities,  confident  of  receiving  their 
indulgent  sympathy.  He  will  be  rudely  shocked. 
For  the  authorities,  intent  upon  keeping  prices  low  in 
the  consumer's  interest,  will  summarily  dismiss  his 
claims.     So,  faute    de    mieux,   he    must    fall    back    on 


SOCIALISM  167 

his  old   methods   and   organise   the  strike.     But   here 
again  he  will  be   met   and  countered  ;    the  public  will 
stand  no  tampering  with  its  supplies  ;    the  government 
will  be  called  upon  to  take  strong   measures,  and    the 
workman  will  be  ordered  back  to  work,  censured    for 
conspiracy  against  the  common  weal,  and,  if  need  be, 
penalised  for  his  insubordination.     The  servant  of  the 
State  cannot  strike  with  any  prospect  of  success  ;    for 
the  State  is  a  mightier  master  than  any  capitalist   yet 
born.     This  M.  Briand  proved  when  the  railway    men 
of  France  went  on  strike  in  recent  years;  he  ordered  a 
mobilisation  of  the  army,  commandeered  their  services 
as    conscripts    under    military   law  ;     they    dared    not 
disobey  under  penalty  of  court-martial  and  the  strike 
was  broken.     So  too  in  the  Belgian  strike  of  1902;  in 
this  case  the  bourgeois  mobilised  their  civil  forces,  ran 
the  necessary  services  of  the  community  themselves, 
and  showed  the  producers  that  their  threat  could  be 
parried  by  the  united  efforts  of  the  consumers.     Far 
more   powerful   would   be   the   control   of   a   Socialist 
Government,  with  the  whole  force  of  law  and  consti- 
tution at  its  back.     It  may  be  of  course  that  the  State 
will  be  a  more  reasonable  master  than  the  employers 
were,   and  that  the  demands  of  the  workers  will  in 
every  case  be  granted  (though  that  has  not  been  the 
experience  of  public  servants  in  the  past,  and  even  in 
our  own  Post  Office  there  have  been  threats  of  strike), 
but  that  will  avail  nothing  unless  the  demands  of  the 
workers  are  reasonable  too  ;    and  what  ground  have 
we  for  assuming  that  they  will  be.     Men  will  never 
be  satisfied  on  this  side  of  Doomsday  ;    and  it  is  far 
more  probable  that  failing  by  this    method,    they  will 
turn    to   another    more   effective   and   more   insidious. 
Although  they  will  have  lost  their  power  of  industrial 
independence,   at  least   they  will  not  have  lost   their 
voter's  privilege.     As  constituents,  they  can  still  bring 
pressure  to  bear  upon  their  members  and  through  them 

12 


i68  NEW  FALLACIES  OF  MIDAS 

upon  the  Government.  In  our  own  day  such  a  thing 
is  not  unknown.  In  the  Government  dockyards 
workmen  and  groups  of  workmen  have  certainly  had 
recourse  to  poUtical  jobbery  in  order  to  advance  their 
interests.  Under  the  Socialist  state  where  every  man 
and  woman  would  be  a  public  servant,  the  danger 
would  be  increased  a  thousand-fold.  The  largest  group 
of  industrials,  were  their  claim  to  a  hearing  great  or 
small,  would  hold  a  weapon  of  tremendous  power  over 
the  heads  of  unwilling  ministers.  In  the  constitu- 
encies, seats  would  go  to  the  man  who  bid  highest 
in  promises  of  support  to  local  industries  ;  Parliament 
if  not  openly  corrupted,  would  become  the  platform 
of  industrial  strife.  Political  jobbery  and  wire  pulling 
would  outdo  the  evils  of  industrial  competition. 
Larger  issues  would  be  lost  to  sight,  as  already  some  of 
the  younger  states  of  the  world,  where  Labour  govern- 
ments are  in  control,  have  learnt  to  their  bitter  cost. 

That  is  one  danger  which  threatens  SociaHsm's 
success  ;  but  there  is  another  to  follow.  When  the 
direction  of  industry  is  taken  out  of  the  hands  of 
private  persons,  it  must  be  put  into  the  hands  of 
Government  officials.  Now  Government  offices  may 
not  be  as  black  as  they  are  sometimes  painted.  But 
it  is  clear  enough  that  where  not  only  every  clerk,  but 
even  every  head  of  a  department  is  responsible  to 
somebody  above  him,  enterprise  will  be  at  a  discount. 
The  official  cannot  act  without  leave  or  upon  his  own 
initiative.  Before  he  can  travel  forth  along  some 
new  path,  he  must  have  his  passport  vised.  Checks 
and  counter  checks  innumerable  will  be  devised  to 
regulate  his  actions  ;  rules  and  red  tape  bind  him  hand 
and  foot,  so  that  little  by  little  he  falls  into  a  habit  of 
routine  and  fulfils  his  duty  by  the  filling  up  of  forms. 
Fear  of  public  displeasure  too  will  daunt  him  in  every 
project.  The  fatal  error  of  the  official  is  to  be  caught 
blundering.     He  has  little  to  gain  and  everything  to 


SOCIALISM  169 

lose  b}^  taking  risks.     His  strength  like  the  strength  of 
Egypt  of  old  is  to  sit  still.     This  tendency  towards  the 
stagnation  of  officialdom  is  strong  ;    but  fortunately 
it  is  not  inevitable.     We  ourselves  happen  to  be  living 
in  a  progressive   age  ;    we  have  go-ahead  ministers  ; 
the  Government  Departments  have  put  their  shoulders 
boldly  to  the  wheel  ;    and  they  will  have  much  to  show 
for   their   exertions.     In    Education,    Labour   control, 
Public  Health,  and  what  not,  we  shall  likely  enough  see 
wide  and  beneficent  reforms  ;   for  centralisation  creates 
a    motive    power    which    private    enterprise    cannot 
command,  just  as  one  man  at  the  helm  can  steer  the 
ship  more  skilfully  than  the  ill  correlated  efforts  of  a 
hundred  oarsmen.     So   there  can  be  little  doubt  that 
the  state  of  the  future  will  gather  more    and    more 
threads  into  its  own  hands.     Its  ministers  will  wield  a 
tremendous    power    for    good,    and    so    long    as    their 
enthusiasm   is   sustained   and   the   crusading   spirit   is 
upon  them,  they  will  effect  changes  which,  under  the  old 
system  of  laisser  faire,   we  waited  for  in  vain.     But 
none  the  less  behind  the  knight  errant  of  state  control, 
there  sits  the  spectre  of  bureaucracy.     As  the  field  of 
action    becomes    wider    and    the    touch    of    personal 
inspiration  less  vital  and  direct,  then  comes  the  chance 
for  paralysis  and  stagnation  to  return.     State  manage- 
ment is  by  no  means  a  sure  passport  to  efficiency. 
In  France  the  Chemin-de-fer  de  I'Oueste  has  been  notori- 
ously ill  run  ;    and  municipal  undertakings  are  not  as  a 
rule  more  successful  than  those  managed  by    private 
enterprise.     Trade  conducted  as  one  gigantic  national 
concern  would  be  a  perilous  adventure  ;  and  no  pro- 
phecy can  guarantee  that  the  sources  of  enterprise  and 
invention  would  not  be  sapped, — not  altogether  because 
Socialist  man  would  lack  the  old  stimulus  of  private 
property.     It   is   clear,    the   Socialist   would  say,    that 
already    the    vast    majority    of    mankind    do    labour 
without    the   smallest    prospect    of   owning    anything. 


170  NEW  FALLACIES  OF  MIDAS 

As  the  supreme  direction  of  commerce  and  production 
passes  more  and  more  into  the  hands  of  the  few,  the 
number  of  those  who  make  direct  profit  out  of  their 
exertions  is  immeasurably  diminished.  Yet  for  all 
that  bank  directors,  factory  foremen,  industrial 
managers,  working  for  a  fixed  salary,  are  not  less 
industrious  than  the  shopkeeper  or  the  independent 
trader  whose  incomes  depend  solely  upon  the  success 
of  their  own  exertions.  Even  waiters  can  be  attentive 
without  the  expectation  of  a  tip.  Under  Socialism, 
moreover,  invention  and  enterprise  might  easily  be 
encouraged  by  a  suitable  system  of  rewards  ;  and  if  the 
collectivist  ideal  were  not  too  rigidly  maintained,  some 
scheme  of  profit  sharing  would  not  be  difficult  to 
introduce.  But,  apart  from  these  incentives  to  good 
work,  a  high  standard  of  industry  must  depend  most  of 
all  upon  a  widespread  sense  of  duty.  That  motive 
must  supplant  the  lower  motive  of  private  gain ; 
without  it  SociaHsm  is  bound  to  fail.  And  indeed,  if 
stagnation  is  to  be  avoided,  it  can  be  done  upon  one 
condition  only — that  the  people  as  a  whole,  not  merely 
its  higher  officials,  preserve  their  vigour  and  manly 
independence.  Countries  get,  as  it  is  said,  the  Govern- 
ment that  they  deserve  ;  and  the  higher  control  will 
remain  progressive,  only  if  the  nation  itself  remains 
alert,  vigorous  and  ambitious — alert  in  the  choice  of 
its  representatives,  the  control  of  their  policy  ;  vigorous 
that  it  may  Infuse  fresh  blood  into  their  ranks ; 
ambitious  always  to  strike  out  fresh  lines  of  action,  and 
to  improve  upon  their  best.  Now  under  the  Socialist 
order  of  things,  every  man,  woman  and  child  will  be 
a  servant  or  dependant  of  the  State.  They  will  not 
all  wear  brass  buttons  and  peaked  caps  ;  but  none  the 
less  they  will  look  to  the  State  as  master  and  lean  upon 
it  for  support.  Not  merely  will  the  great  captains  of 
industry  and  trade  have  passed  away  ;  but  the  personal 
independence  of  the   middle  class,    the    small    shop- 


SOCIALISM  171 

keeper,  the  yeoman  farmer,  the  professional  man  will 
have  vanished  with  them.  Those  many  millions,  too, 
whose  life  is  even  now  a  life  of  dependency  and  service, 
will  become  more  dependent  and  not  less.  To-day  the 
men  exercise  some  freedom  at  least  in  the  choice  of 
the  trade  they  shall  follow,  the  master  they  shall  serve, 
and  the  age  at  which  they  shall  retire.  But,  once 
caught  in  the  vast  organisation  of  a  State  intent  upon 
turning  its  human  material  to  the  best  advantage,  they 
will  find  themselves  mere  ciphers  in  the  hands  of  others. 
Marked  out  at  school  for  the  trade  or  profession  to 
which  their  capacity  best  suits  them,  they  will  be 
drafted  out  by  the  centraHsed  bureaux  of  employment, 
and  set  into  their  appointed  place.  The  term  of  their 
working  days  will  be  fixed  by  a  system  of  pensions  and 
superannuation  such  as  is  now  current  in  our  civil 
services.  I  do  not  say  that  their  lives  will  be  less 
useful  or  less  happy  for  all  this  ;  but  it  is  certain  that 
their  spirit  cannot  retain  its  old  independence  ;  their 
individuality  must  suffer.  Character  is  not  to  be 
manufactured  by  methods  of  compulsion.  A  man 
learns  most  and  best  not  what  he  is  made  to  do,  but 
what  he  does  of  his  free  choice,  from  his  blunders 
as  well  as  from  his  successes.  Take  away  his  liberty, 
and  he  will  never  gain  self-control.  Deprive  him  of 
money  and  he  will  never  learn  to  be  honest  ;  forbid  him 
to  touch  drink  and  he  will  never  acquire  the  habit  of 
true  temperance.  Wine,  as  the  Spartans  used  to  say, 
is  the  best  schoolmaster.  So  \Aith  the  strong  wine  of 
economic  liberty. 

And  this  is  what  the  SociaHst,  in  his  hurry  to  reform 
mankind,  too  frequently  forgets.  Consider  Lloyd 
George's  Insurance  Act  and  its  effect  upon  the  people. 
So  long  as  membership  to  a  Friendly  Society  was 
optional  to  a  man,  he  was  free  to  pay  a  subscription  or 
not  as  he  chose.  Now  he  has  no  such  choice  ;  but 
though    we   have    forced   him    to   save,    we    have    not 


172  NEW  FALLACIES  OF  MIDAS 

taught  him  thrift ;  for  virtue  is  something  more  than 
the  negative  of  vice.  Or  consider  the  case  of  com- 
pulsory education  with  its  attendant  schemes  for 
pubHc  meals  for  the  children.  Excellent  as  these  are, 
there  can  be  no  doubt  that  the  parents  lose  the  sense 
of  their  personal  responsibility  for  the  child.  They 
tend  to  regard  the  child's  upbringing  as  mainly  the 
school-master's  business  and  are  ready  to  wash  their 
hands  of  the  nuisance.  There  is  no  question  here 
concerning  the  benefit  of  these  two  measures  ;  but 
however  beneficial  and  however  necessary  compulsion 
may  be,  it  none  the  less  has  its  dangerous  side. 
It  is  true  that  by  removing  the  weight  of  certain 
responsibilities  from  the  individual's  shoulders,  the 
State  can  set  him  free  for  better  and  higher  activities. 
By  securing  his  health,  his  proper  education,  it  enables 
him  to  lead  a  better  and  more  useful  life  in  other  ways. 
That  is  a  fair  defence  for  compulsion  ;  but  there  must 
be  a  limit  to  the  argument ;  for  as  the  Socialistic  State, 
eager  to  see  all  its  members  behaving  as  they  should, 
encroaches  raore  and  more  upon  the  various  sides  of  the 
individual's  life,  it  must  by  that  very  process  turn  him 
more  and  more  into  a  machine,  and  once  his  sense  of 
responsibility  is  gone,  his  power  of  initiative  must 
surely  follow. 

It  is  the  common  error  of  reformers  to  imagine  that 
the  shortest  road  is  always  the  best  way  home  ;  and 
the  Socialist  has  forgotten  that  it  is  the  seed  which 
matures  most  slowly,  that  yields  the  richest  harvest. 
His  state  would,  it  is  clear,  bear  early  and  abundant 
fruit.  Its  efhciency  would  be  beyond  question  ;  but 
even  efficiency  may  prove  rotten  at  the  core.  The 
German  people  have  organised  their  country's  wealth 
both  human  and  material  with  unparallelled  efhciency  ; 
yet  throughout  the  war  the  greater  faculty  of  initiative, 
invention  and  resource  has  not  been  upon  the  German 
side.     It  may  well  be  doubted  whether  in  the  long  run 


SOCIALISM  173 

they  would  even  have  out-stripped  their  rivals  in  the 
field  of  trade  and  manufactures.  But  even  had  they 
done  so,  such  a  victory  would  have  been  purchased  at 
too  great  a  cost.  There  are  things  in  life  of  higher 
value  than  material  prosperity  ;  and  the  man  or 
nation  that  sets  success  before  conscience,  and  effi- 
ciency above  character,  is  signing  the  fatal  compact  of 
Faustus. 

Socialism  may  fairly  claim  that  by  its  democratic 
institutions  it  would  avoid  the  grosser  errors  of  the 
Germans  ;  but  just  because  it  could  never  be  content 
to  leave  the  individual  to  himself  that  he  might  learn 
by  his  blunders  and  misfortunes  the  very  lessons  which 
Hfe  is  meant  to  teach  him,  it  is  certain  that  SociaHsm 
could  never  raise  him  to  the  level  to  which  he  is  meant 
to  rise.  The  spirit  of  service  and  self-sacrifice  which 
Socialism  upholds,  is  a  fine  and  noble  ideal ;  but  the 
service  and  the  sacrifice  must  come  from  within  a 
man's  own  self.  For  no  political  system  can  make 
human  beings  good  or  happy  ;  that  they  can  only 
accomplish  for  themselves  ;  and  before  they  can 
accomplish  it,  they  must  have  been  educated  to  the 
part,  learning  in  the  hard  school  of  experience,  and 
exercising  their  own  liberty  of  choice.  And  on  the  day 
when  the  lesson  shall  have  been  learnt,  there  will  be  no 
need  for  Socialism  any  more  ;  the  millenium  will  have 
arrived. 


NOTE    ON    CO-OPERATIVE    SOCIETIES    OF 

CONSUMERS. 

It  would  not  be  right  to  close  this  chapter  without 
making  some  reference  to  the  great  practical  experi- 
ment in  Socialistic  methods  which  has  been  conducted 
by  the  Co-operative  Societies  of  Consumers.  Though 
due  to  the  private  enterprise  of  individuals,  and  being 


174  NEW  FALLACIES  OF  MIDAS 

therefore  in  no  sense  a  preliminary  instalment  of 
State  Socialism,  this  organisation  is  nevertheless 
in  essence  Socialistic  and  not  Syndicalist :  for,  as  its 
name  implies,  it  is  designed  first  and  foremost  to 
promote  the  interest  of  the  consumer  rather  than  the 
producer  :  and  for  this  reason  it  is  to  be  distinguished 
from  the  parallel  movement  known  as  co-operation  of 
producers,  with  which  it  is  frequently  coupled. 

The  method  of  these  Societies  will  perhaps  be  best 
understood  by  looking  back  to  their  prototype  and 
model,  the  Society  of  the  Rochdale  Co-operators,  which 
not  only  gave  the  earliest  impulse  to  the  movement,  but 
also  laid  down  in  its  main  outline  the  policy  that  has 
been  followed  ever  since.  In  the  year  1844,  twenty- 
eight  Rochdale  weavers  clubbed  together  to  form  a 
Co-operative  Store.  Each  saved  the  modest  sum  of 
twenty  shillings  and  upon  this  tiny  capital  the  store 
was  opened.  The  advantage  at  which  the  weavers 
aimed  was  nothing  less  than  the  elimination  of  the 
professional  retailer  and  the  diversion  of  the  pro- 
fessional retailer's  profits  into  the  pockets  of  the 
members.  Goods  were  bought,  and  were  sold  to 
members  across  the  counter  (one  of  the  weavers  himself 
acting  as  salesman  in  the  first  instance)  not  at  cost 
price,  but  at  the  rates  then  prevailing  in  the  neigh- 
bourhood. The  surplus  profits  of  the  business  were 
then  reckoned  up  and  at  fixed  intervals  distributed 
among  the  members  each  receiving  in  proportion  to  the 
purchases  that  he  had  made.  This  important  and  novel 
principle  proved  then  and  has  proved  ever  since  so 
effective  a  means  of  inducing  members  to  do  a  maxi- 
mum amount  of  business  at  the  store,  that  it  has  been 
generally  adopted  by  the  numerous  Societies  which 
have  followed  the  lead  of  the  Rochdale  pioneers. 
For  the  idea  took  strong  hold  on  the  working  classes. 
By  1904,  there  were  nearly  fifteen  hundred  societies  in 
existence.     Over  two  million  members  were  subscribing 


SOCIALISM  175 

their  savings  to  the  capitalisation  of  these  concerns, 
the  working  funds  of  which  then  ran  to  thirty  miUions, 
the  annual  turn-over  to  sixty  million  pounds.  The 
movement  is  growing  still :  and  in  the  first  decade 
of  this  century  alone,  the  membership  increased  by 
one  half.  It  draws  its  adherents  chiefly  from  among 
the  better  paid  workers  :  for  the  very  poor  have  no 
money  to  invest ;  the  rich  prefer  other  channels  for 
investment.  Its  activities  which  were  at  first  con- 
fined to  the  retail  trade  only,  have  gradually  been 
enlarged.  The  first  step  was  a  very  natural  extension 
to  the  wholesale  trade.  To  this  the  Societies  were  in 
a  manner  forced,  partly  because  the  various  stores 
were  found  to  be  buying  against  one  another  in  the 
wholesale  market,  partly  because  the  independent 
retailers,  jealous  of  their  too  successful  rivals,  were 
trying  to  press  the  wholesale  merchants  to  a  boycott. 
The  upshot  was  that  in  1864,  the  Co-operative  Whole- 
sale Society  was  founded  :  to  be  followed  a  few  years 
later  by  the  estabhshment  of  a  similar  society  in 
Scotland.  But  this  step  soon  led  to  another.  Inde- 
pendent as  they  now  might  be  of  the  wholesale 
merchant,  the  societies  were  still  at  the  mercy  of  the 
manufacturer,  and,  gradually,  they  awoke  to  the 
obvious  advantages  of  manufacturing  for  themselves. 
Production  was  not  indeed  a  complete  novelty  in  the 
history  of  the  movement :  and  in  quite  early  days  we 
find  the  Co-operatives  in  possession  of  a  flour-mill. 
But  once  it  was  undertaken  in  real  earnest,  their 
productive  enterprise  grew  apace.  Fruit  farms, 
dairies,  coal-mines,  and  even  tropical  plantations 
were  acquired.  Factories  were  started  for  the  manu- 
facture of  clothing,  boots,  soap,  saddlery,  and 
furniture.  Not  even  transport  was  neglected,  and  in 
due  course  a  line  of  co-operative  steamers  began  to  ply 
between  English  and  continental  ports.  In  short, 
the  whole  process  of  production,  from  mine  or  field 


176  NEW  FALLACIES  OF  MIDAS 

right  up  to  the  store  counter  has  been  brought  step  by 
step  within  the  scope  of  co-operative  enterprise. 

In  many  cases,  it  is  true,  actual  achievement  has 
been  small :  and  some  have  even  written  down 
co-operative  production  as  a  failure  :  but  at  least  it 
points  the  way  towards  greater  things.  It  has  proved 
that  the  working-class  consumer  can,  by  combination, 
dispense  with  the  services  of  the  capitalist  and  organise 
for  himself  the  supply  of  his  own  chief  wants.  A 
movement  so  prosperous  and  ambitious  cannot  stand 
still :  it  is  already  a  power  in  the  land  to  which  the 
passage  of  each  year  brings  fresh  addition  of  strength. 
Recently  it  has  entered  the  field  of  politics  :  its  can- 
didates are  preparing  to  stand  at  the  next  parliamentary 
election  :  and  its  alliance  with  the  Labour  Party  itself 
gives  a  clear  indication  of  its  future  policy.  But, 
wonderful  progress  as  the  movement  has  now  made 
in  the  seventy  years  of  its  life,  we  can  scarcely  gauge 
its  true  potentialities  except  by  examining  more 
closely  its  natural  scope  and  limitations — and  to  these 
we  must  now  pass. 

First,  then,  of  its  achievement.  To  the  working 
class  consumer  threatened  by  the  tyranny  of  the 
capitalist  profiteer,  co-operation  has  proved  a  veritable 
bulwark  of  defence.  By  offering  a  strong  incentive  to 
economy  and  by  opening  an  easy  channel  for  invest- 
ment, it  has  given  him  the  opportunity  (hitherto  but 
rare)  of  controlling  in  part  at  least  the  apparatus  of 
production  and  supply.  But  it  does  more  than  this  : 
to  combat  the  forces  of  Capitalism  without,  would  be 
small  gain  if  the  self-same  forces  were  allowed  to  gain 
a  foothold  within  the  societies  themselves.  This 
however  the  very  form  of  their  constitution  effectually 
prevents.  When  every  member  is  on  a  footing  of 
equality,  when  one  pound  invested  in  the  Society's 
funds  carries  the  same  authority  as  a  thousand,  where 
"  one  shareholder,  one  vote  "  is  the  democratic  prin- 


/ 


SOCIALISM  177 

ciple  of  co-operative  control,  it  is  clear  that  no  single 
shareholder  can  gain  a  predominant  position  over  his 
fellows.  There  can  be  no  magnates  of  co-operative 
finance.  Thus  there  would  seem  to  be  a  real  truth  in 
the  societies'  claim  that  they  have  exorcised  within 
themselves  the  hated  spirit  of  commercialism.  Com- 
petition between  member  and  member,  or  between 
store  and  store  becomes  altogether  meaningless,  when 
"  profits  "  are  distributed,  not  in  proportion  to  each 
member's  capital,  but  in  proportion  to  the  purchases 
that  each  member  makes.*  Best  of  all,  this  beneficent 
change  has  been  accomplished,  not  (as  under  socialism) 
by  a  universal  S3^stem  of  compulsion,  but  by  the 
spontaneous  act  of  individual  men  and  women.  The 
Co-operative  Movement  works  through  no  paternal 
discipline  of  State  :  rather  it  is  of  itself  a  liberal 
education  in  economic  freedom,  an  opportunity  for  the 
personal  exercise  of  economic  wisdom,  and  a  stimulus 
to  the  virtues  of  independence  and  self-help. 

Yet  against  this  special  excellence  of  the  co-operative 
scheme  must  be  set  its  one  fundamental  weakness. 
For,  while,  like  SociaUsm,  it  sets  out  to  solve  the  great 
economic  problem  of  the  day,  it  cannot,  like  Socialism, 
pretend  to  offer  a  complete  solution,  simply  because  it 
can  never  hope  to  cover  the  whole  field  of  economic 
life.  That  problem  it  approaches,  as  we  have  seen, 
from  one  side  only,  the  side  of  the  working-class 
consumer.  His  conscious  and  immediate  wants  it 
attempts  to  satisfy  and  may  succeed  in  satisfying  : 
but  with  production  other  than  that  which  satisfies 
those  needs,  it  is  not  interested.  When,  however,  we 
come  to  consider  our  own  national  industries,  it  will 
at  once  be  seen  that  they  are  by  no  means  confined  to 
this  narrow  field.  Our  workshops  and  factories  are 
engaged  in  turning  out  cantilever  bridges  and  trans- 

♦  Invested  capital  receives,  it  is  true,  a  regular  dividend  ;    but  this 
at  no  more  than  a  standard  rate  of  four  or  five  per  cent. 


178  NEW  FALLACIES  OF  MIDAS      . 

atlantic  liners  as  well  as  handkerchiefs  and  tea-pots. 
An  enormous  quantity  of  our  out-put  is  destined  for 
exportation  :  much  of  it  consists  of  articles  which  are 
of  no  use  whatever  to  the  poor.  Co-operative  societies 
could  not  well  undertake  to  supply  the  Admiralty  with 
coal :  they  could  hardly  engage  upon  a  contract  for 
building  a  railway  in  Peru.  Hence  it  seems  clear 
that  they  can  never  capture  many  of  our  largest  and 
most  prosperous  industries.  Let  us  admit  that  one 
day  the  class  from  which  their  members  are  drawn 
may  to  a  large  extent  become  economically  self-con- 
tained :  that  is  to  say,  the  large  number  of  the  popu- 
lation may  stand,  as  it  were,  apart  producing  by  them- 
selves and  for  themselves  the  chief  necessities  of  life, 
consuming  the  products  of  co-operative  farms,  wearing 
clothes  woven  on  co-operative  looms,  and  using  articles 
of  furniture  produced  in  co-operative  shops.  But 
there  the  natural  function  of  the  Societies  must  cease. 
They  cannot  oust  the  private  capitalist  from  his  control 
of  other  industries.  Working  side  by  side  with  him, 
and  often  in  competition  with  him,  they  may  indeed 
hold  their  own  and  serve  their  appointed  end  :  but 
the  main  economic  fabric  of  society  will  not  be  radically 
changed,  because  a  part  of  it  is  organised  on  a  popular 
basis  and  pays  dividends  in  a  peculiar  fashion.  The 
societies  will  remain,  as  Lord  Rosebery  said  of  them,  a 
State  within  the  State,  a  co-operative  island  in  a 
Capitalist  sea.* 

Before,  however,  even  such  limited  success  can  be 
attained,  the  problems  and  difficulties  which  must  be- 
faced  and  overcome  are  numerous  enough.  Two  in  parti- 
cular seem  to  call  for  mention  here  :  and  both  concern 
co-operation  upon  its  productive  side.     The  first  has 

*  In  the  report  of  the  Fabian  Research  Committee  it  is  estimated  that, 
given  the  widest  possible  extension  of  co-operative  business,  it  might 
eventually  cover  one-fifth  but  no  more  than  one-fifth  of  the  total 
national  production. 


SOCIALISM  179 

to  do  with  its  relation  to  the  rival  agents  of  production  ; 
for  with  these,  until  they  have  established  a  monopoly, 
the  societies  must  in  very  self-defence  compete. 
Now  as,  we  have  seen,  they  are  not  primarily  money- 
making  concerns  :  and  for  this  reason  they  lack  the 
incentive  which  stimulates  the  energy  and  imagination 
of  the  private  capitalist  or  trader.  He,  for  his  part, 
is  ever  on  the  alert  to  find  a  new  market  for  his  goods, 
and  to  adapt  his  production  to  some  change  of  taste 
and  fashion.  In  other  words,  he  tries  to  create 
demand  ;  the  co-operatives  follow  it.  His  object  is 
to  discover  fresh  needs  :  theirs  to  supply  the  needs  they 
see.  Hence  co-operative  production  is  apt  to  be  too 
cautious  and  conservative.  The  very  security  of  its 
market  is  a  discouragement  to  bold  initiative  :  and 
so  there  is  a  real  danger  that  co-operative  industry  will 
lag  behind,  content  to  employ  old-fashioned  easy- 
going methods,  and  to  supply  goods  inferior  in  quaUty 
to  the  goods  of  its  capitalist  rivals.  If  that  prove 
to  be  the  case,  success  will  be  long  in  coming  :  perhaps 
will  never  come  at  all,  and  the  first  problem  therefore 
is  briefly  this  :  can  the  standard  of  co-operative 
production  be  kept  high,  and  at  the  same  time  the 
standard  of  co-operative  ideals  not  be  lowered,  or 
must  the  bare  fact  of  external  competition  involve  some 
concession  to  the  spirit  of  commercialism  ? 

The  second  problem  springs  in  part  from  the  first : 
for  closely  connected  with  their  relation  to  competitors 
is  the  Societies'  relation  to  their  own  employees. 
Amongst  the  many  methods  whereby  the  private 
capitalist  is  enabled  to  over-reach  or  outstrip  his 
rivals,  not  the  least  fruitful  is  the  employment  of 
cheap  labour  :  and  it  is  clear  that  if  by  paying  low 
wages  he  can  produce  his  goods  at  a  lower  price  than 
the  co-operatives,  they  will  once  again  be  placed  in  a 
dilemma.  They  can  hardly  hope  to  extend  their 
market,  so  long  as  their  goods  are  dear  in  comparison 


i8o  NEW  FALLACIES  OF  MIDAS 

with  his  :  yet  the  democratic  principles  for  which  they 
stand  forbid  that  they  should  offer  to  others  a  wage 
which  would  not  satisfy  themselves.  This  problem  is 
one  which  admits  of  no  evasion  :  for  with  the  increasing 
growth  of  co-operative  production  it  is  likely  to  become 
more  acute,  not  less.  Hitherto,  it  is  true,  the  difficulty 
has  been  tided  over.  Employing  though  they  do  some 
hundred  thousand  hands,  the  Societies  have  never- 
theless been  able  to  give  them  generous  treatment ; 
and  the  wages  they  offer  compare  favourably  with  the 
wages  paid  by  their  capitalist  rivals.  On  the  other 
hand  we  must  remember  that  the  great  majority  of 
their  employees  are  women  and  girls,  who  have  as  yet 
developed  no  strong  organisation  of  defence  nor 
corporate  feeling  of  injustice  :  and  we  may  be  sure 
that  as  the  industrial  enterprise  of  the  societies  expands, 
it  will  less  easy  for  them  to  satisfy  the  claims  of  their 
employees  than  it  has  been  in  the  past.  At  a  time 
when  the  workers  are  demanding  a  larger  and  larger 
share  in  the  profits  of  production,  it  is  unlikely  that 
they  will  make  any  exception  in  the  co-operatives' 
favour.  If  their  demand  on  capital  is  just,  it  matters 
little  to  whom  that  capital  belongs  :  and  whatever 
is  extorted  from  the  private  capitalist,  will  be  required 
of  co-operative  capital  also. 

This  question  is,  of  course,  no  new  one  and  it  has 
long  exercised  the  minds  of  the  co-operatives  them- 
selves. Their  former  coolness  towards  the  Trades 
Unions  arose  mainly  from  this  cause.  They  have  even 
experienced  strikes  and  labour  troubles  in  their  own 
factories  and  shops  :  and  even  with  the  Trades  Unions 
as  their  allies  the  question  can  hardly  as  yet  be  con- 
sidered closed.  Various  expedients  have  been  devised 
to  meet  it.  The  plan  of  admitting  the  employees  to 
some  share  of  the  control  has  been  considered  only  to 
be  rejected.  The  Scottish  societies  have  tried  to  solve 
the  difficulty  by  admitting  them  to  a  participation  of 


SOCIALISM  i8i 

the  profits.  But  such  a  concession  is  not  merely  at 
variance  with  the  co-operative  view  of  profits,  but  is 
also  open  to  just  the  same  objections  as  when  it  is 
made  by  the  capitalist  employer.  The  fact  is  that  so 
far  from  solving  the  problem  of  industrial  profits, 
Co-operation  has  merely  carried  it  one  step  further 
back.  When  the  issue  ceases  to  lie  between  master 
and  man,  it  is  revived  again  between  producer  and 
consumer.  Between  the  interests  of  these  two,  there 
must  be  conflict,  so  long  as  there  is  also  division  of 
labour  or  a  system  of  exchange.  It  is  the  fundamental 
antagonism  of  economic  life  :  and  reconciliation  can 
come  in  two  ways  and  two  ways  only.  One  is  by  the 
adoption  of  State  Socialism,  that  is,  by  force.  The 
other  is  by  a  voluntary  and  universal  recognition  of 
the  economic  brotherhood  of  man. 

Now  it  is  for  the  latter  ideal  that  Co-operation  above 
all  stands  :  and  in  its  loyalty  thereto  must  lie  its 
ultimate  chances  of  success.  For  while  it  can  never 
hope  to  conquer  capitalism  by  capitalist  methods,  it 
may  yet  win  the  world  by  converting  it.  The  two 
problems  of  which  we  have  spoken,  will  be  solved,  if 
they  are  to  be  solved  at  all,  by  maintaining  co-operative 
idealism,  not  by  debasing  it.  The  solution  of  the  first 
must  come  by  offering  the  best  possible  value  to  the 
purchaser  of  goods  ;  the  solution  of  the  second  by 
offering  the  fairest  possible  wage  to  the  employee. 
In  preferring  fair  prices  before  large  profits,  in  setting 
commercial  honesty  above  the  capture  of  markets,  in 
upholding  standards  of  good  workmanship,  and  in 
,  rejecting  all  that  is  shoddy  and  unsound,  the 
I  Co-operative  societies  may  set  a  pattern  to  the  world  ; 

■  and  notwithstanding  that  progress  may  be  slow,  it 
•  will  none  the  less  be  sure  :  for  such  methods  bring  their 
,  own   reward.     So   too,   by   resolutely  insisting   on   an 

■  equitable  wage-scale,  without  undue  regard  for  profits 
on  the  one  hand,  or  undue  leniency  to  the  workers  on 


i82  NEW  FALLACIES  OF  MIDAS 

the  other,  they  may  do  much  to  settle  the  old  quarrel 
between  employers  and  employed.  For  they  will 
teach  a  practical  lesson  to  both  parties  :  it  will  become 
clear  to  the  employer  that  what  the  Co-operatives  can 
afford  to  pay,  must  also  be  possible  for  him  :  and  from 
the  Co-operatives'  experience  the  employed  will  learn 
what  wages  are  possible  and  what  are  not.  Finally 
and  above  all,  there  is  much  virtue  even  in  a  name. 
So  long  as  competition  was  the  catchword  of  the  day, 
it  is  little  wonder  that  men  even  thought  it  a  duty  to 
outbid  or  undersell  a  rival.  But  once  the  idea  is 
spread  abroad,  that  co-operation  can  succeed  where 
competition  has  failed,  then  surely  we  may  hope  to 
see  the  jealousies,  suspicions  and  injustices  of  the  past 
yield  place  to  a  new  and  generous  spirit  of  good  fellow- 
fellowship  and  trust. 


Chapter  XIV 
FALSE  SOCIALISM  OR  THE  SERVILE  STATE 

(M   • 

It  is  the  one  great  merit  of  the  Socialistic  method  that 
it  is  constitutional.  For  though  its  end  is  revolu- 
tionary, the  means  to  that  end  are  not.  Socialism 
does  not  run  counter  to  the  principles  of  democracy  ; 
it  does  not  seek  to  flout  the  supreme  authority  of  the 
State  but  rather  to  reinforce  it.  Its  battles  will  be 
fought  out,  not  at  the  barricades,  but  across  the  benches 
of  the  House  of  Commons.  In  other  words,  socialism 
could  only  be  established  by  the  express  will  of  the 
people  and  through  the  votes  of  its  elected  leaders. 
Yet  just  because  the  socialist  movement  is  a  political 
movement,  pursuing  its  aims  through  constitutional 
courses,  it  is  for  this  very  reason  exposed  to  a  peculiar 
danger.  Democracy  is  a  sea  of  shifting  tides  and  many 
incalculable  currents,  and  the  strong  flow  of  the  people's 
will  may  often  be  stemmed,  or,  if  not  stemmed,  diverted 
into  unexpected  channels.  Parliament's  policy  is 
influenced  by  much  else  besides  the  ballot-box.  All 
manner  of  interests  are  reflected  in  its  changing  counsels 
and  of  these  interests  Labour  is  by  no  means  the 
strongest  or  most  united  ;  still  less  is  it  the  most  skilful 
or  experienced  in  the  game  of  poHtical  tactics.  So  the 
very  methods  by  which  Labour  feels  its  way  towards  the 
socialistic  system,  may  be  used  by  others  to  thwart 
its  purpose  and  render  its  seeming  victories  innocuous. 
If,  as  we  often  boast,  England  is  in  truth  a  democratic 
country,  there  was  never  surely  a  democracy  in  which 


i84  NEW  FALLACIES  OF  MIDAS 

the  authority  of  wealth  and  privilege  were  allowed  to 
survive  so  long,  so  openly  or  so  effectually.     After  two 
Reform  Bills,  the  introduction  of  the  secret  ballot,  and 
the  diminished  power  of  the  House  of  Peers,  the  country 
has   continued   to   accept   the   rule   of   a   "  governing 
class."     Two    thirds    at    least    of    its    parliamentary 
representatives  are  still  drawn  from  the  ranks  of  the 
gentry,  men  bred  in  the  traditions  and  prejudices  of 
their  station,  and  educated  in  those  twin  strongholds 
of    aristocratic    privilege,    the     Universities    and    the 
PubHc  Schools.     In  the  atmosphere  of  a  House  thus 
constituted,  the  Labour  Party  has  struggled  almost  in 
vain  to  keep  its  head  clear  ;    and  in  the  course  of  time 
has  become  half  assimilated  to  it.     Some  of  its  members 
rose  indeed  to  office  ;    but  even  men  like  John  Burns, 
seemed  susceptible  to  the  influences  of  departmental 
tradition  ;  and  before  long,  many  declared  that  he  had 
turned  Tory  in  his  old  age.      So  it  may  fairly  be  said 
that  before  the  war  no  authentic    spokesman  of  the 
people  had  as  yet  attained  to  a  predominant  political 
position.     Meanwhile,  wealth  had  rapidly  been  gaining 
an  even  stronger  purchase  upon  the  reins  of  power. 
How  deep  or  how  far  reaching  was  its  influence,  only 
the  poHticians  could  tell.     But  the  strength  of  vested 
interests  was  frequently  sufhcient  to  defeat  reform  ; 
and  it  was  the  common  complaint  of  Labour  that  when 
Government   intervened   upon   industrial    disputes,    it 
too  often  ranged  itself  openly  upon  the  side  of  the 
employer.     The  advent  of  the  war  bringing  as  it  did 
vast  increase  of  wealth  to  those  who  were  already  rich, 
making  them,  through  the  medium  of   repeated  loans 
the  giant  creditors  of  the  nation,  and  serving  at  the 
same    time    to   break   up    the   organised   strength    of 
the  Trades'   Unions  and  to  compel  the  suspension  of 
industrial  strife— the  war,  I  say,  though  it  has  also  at 
the   same   time   let   loose    the   flood    of   revolutionary 
passions,    cannot   but   have    added    to   the   power   of 


THE  SERVILE  STATE  185 

wealth.     \A'ith    the    coming    of   peace,    the     capitalist 
will  be  found  doubly  armed  against  his  adversary  the 
working-man.     Not   only   can   he   fight   him — as   well 
perhaps  as  ever — upon  the  old  industrial  battle-ground  ; 
but  like  a  skilful  strategist  he  may  strike  in  another 
quarter,  and  while  yet  the  ranks  of  Labour  are  dis- 
integrated and  the  reorganisation  of  industry  is  taking 
place,  he  may  mobilise  even  more  powerful  forces  and 
ambush   the   enemy   upon   the   field   of  politics.     For 
politics  will  play  no  small  part  in  the  re-shaping  of 
industry.     Already  the  war  has    led  to    the   concen- 
tration of  immense  powers  in  the  hands  of  our   states- 
men  and  officials.     It  has  brought  about  the  temporary 
nationalisation  of  mines  and  railways.     It  has  given 
us  a  public  Ministry  of  Agriculture  and  Shipping  and 
Food.     There  is  scarcely  a  department  of  the  national 
life  which  has  been  left  untouched  by  State  control. 
And  the  return  of  peace,   so  far  from  loosening   the 
bonds,    may   well   serve   to   draw   them   tighter.     The 
Government  which  handles  the  demobilisation  of  the 
army,  will  exercise  wide  powers  over  the  redistribution 
of  labour  and  the  new  conditions  of  employment,   and 
such  an  opportunity  for  central  organisation  it  'could 
not,  if  it  would,  refuse.      The  economic  situation  will 
not  allow  of  such  a  course.     Food  will  be  scarce  and 
famine  perhaps  perilously  near.     Raw  materials  will  be 
scarcer   and   industry   sorely   crippled  by  its  lengthy 
dislocation.     Private  capital  will  be  exhausted  by  the 
exigencies   of  war  finance,   and  helpless   to   meet   the 
coming  struggle  for  the  world's  markets.     The  crisis 
(for  it  will  be  no  less)  will  call  for  measures  even  more 
autocratic    and    comprehensive    than    we     have     yet 
witnessed  ;   and  for  the  time  being  the  Cabinet  may  be 
compelled    to    take  the  whole  business  of    production 
and  supply  under  its  own  control.     Here  then  is  the 
Socialist's     opportunity  ;        these     sweeping,     though 
temporary,  expedients    surpass    his    wildest     hopes  ; 


i86  NEW  FALLACIES  OF  MIDAS 

and  he  may  well  see  in  them  a  stepping  stone  to  a 
full  and  permanent  execution  of  his  programme. 
Yet  while  he  is  rejoicing  over  the  triumph  of  the 
cause,  let  him  beware  lest  he  shall  have  played  into  the 
capitalists'  hands  and  lest  his  be  but  a  hollow  victory 
after  all.  The  lessons  of  history  are  plain  ;  nations 
have  before  now  won  comfort  and  security  by  bartering 
away  their  independence ;  and  into  the  same  fatal 
error,  Labour  too  may  easily  fall.  That  in  the  next 
few  years  the  working-man  will  obtain  manifold  con- 
cessions in  higher  wages,  more  tolerable  conditions 
and  better  organisation  against  unemployment,  this 
is  not  to  be  doubted.  But  if  when  he  accepts  these 
bounties  from  the  State  he  accepts  them  upon  terms 
which  curtail  his  Hberty  of  action,  his  freedom  of 
contract  and  his  power  to  fight,  then  he  will  have  been 
out-manceuvred  ;  he  will  have  lost  the  campaign. 

(ii.) 

For  the  reforms  which  seem  to  lead  along  the  road  to 
Socialism,'  may  in  reality  lead  us  unsuspecting  to  a 
very  different  goal.  That  goal  is  the  Servile  State. 
The  phrase  and  the  political  theory  which  it  covers, 
are  alike  Mr.  Belloc's  ;  the  Servile  State  is  in  fact  the 
peculiar  bogey  of  his  own  invention.  It  is  defined  by 
him  as  "  a  condition  of  society  wherein  one  class  of  the 
people  is  constrained  by  positive  law  to  labour  for  the 
advantage  of  another  class. "  The  mark  and  sign  of 
the  Servile  State  is  a  legislation  which  discriminates 
between  two  classes,  the  Capitalist  class  and  the  Pro- 
letarian class,  and  which  imposes  certain  definite 
obligations  upon  the  latter,  as  proletarian,  and  because 
it  is  proletarian,  and  accepted  by  them  in  consideration 
of  specific  concessions  whereby  a  decent  standard  of 
comfort  and  security  is  guaranteed  to  them.  The 
Servile  State  is  in  short  a  compromise,  through  which 


THE  SERVILE  STATE  187 

Labour's  title  to  receive  a  fair  ^vage,  and  Capital's 
right  to  compel  work  in  return,  are  alike  ratified  by  law. 
Now  it  is  of  the  nature  of  all  bounties  and  concessions 
that  they  should  carry  with  them  a  corresponding 
obligation  on  the  part  of  the  recipient.  If  I  accept  a 
favour  from  a  friend,  I  am  morally  bound  to  do  him 
some  favour  in  return.  So  when  the  Lady  Bountiful 
of  fifty  years  ago  provided  her  tenants  with  woollen 
goods  at  Christmas  time  or  soup  when  they  were  ill, 
she  expected  that  they  on  their  part  should  "  look 
up  "  to  her,  should  behave  in  such  and  such  a  manner 
when  they  met  her  on  the  road,  and  in  general  should 
recognise  their  status  as  inferior  beings.  All  this 
was  doubtless  very  proper  and,  so  long  as  the  obliga- 
tion remained'  a  sentimental  and  personal  concern, 
quite  harmless.  But  when  the  obligation  becomes 
impersonal  or  absolute  and  is  exalted  to  the  rank  of 
a  theory,  the  case  is  different.  To-day  charity  has 
ceased  to  be  a  virtue  and  has  become  a  science.  The 
poor  man  is  no  longer  an  object  for  benevolence  and 
almsgiving  ;  but  for  investigation,  for  supervision,  and, 
if  need  be,  for  disciplinary  treatment.  His  state  of 
necessity  is  held  to  give  his  benefactors  the  right  to 
dictate  humiliating  terms  ;  and  his  submission  to 
various  inquisitions  and  restrictions  is  a  primary 
condition  of  relief.  The  Charitable  Body  of  to-day  very 
naturally  insists  that  no  help  shall  be  given  to  any  man 
whose  past,  present  and  future  conduct  does  not 
conform  to  its  own  standards  of  right  behaviour ; 
nor  would  there  be  much  harm  in  this  perfectly  just 
procedure,  were  it  not  that  consciously  or  uncon- 
sciously the  benefactors  of  the  poor  have  been  betrayed 
thereby  into  a  fixed  and  settled  habit  of  mind.  They 
come  to  regard  the  poor  not  as  ordinary  members  of  the 
community  but  as  a  class  apart  which,  being  proved 
incapable  of  ordering  its  own  affairs,  is  in  need  of 
external  direction  and  assistance.     "  If  the  poor  will 


i88  NEW  FALLACIES  OF  MIDAS 

not  work,"  says  the  charitable  body,  "  they  must  be 
compelled  ;  if  they  will  not  save,  we  must  make  them  ; 
if  they  will  not  keep  their  houses  clean  and  healthy, 
we  must  pass  a  law  to  ensure  that  the  kitchen  window 
is  kept  open  and  the  kitchen  floor  scrubbed  out  at  least 
once  in  a  week."     The  benefactor  moreover  belonging, 
as  he  usually  does,  to  a  class  which  is  capable  of  ordering 
its    own    affairs,   concerns    himself  solely    with    the 
poor.     For  him  the  rich  are  above  the  law  ;   and  if  for 
example  some  improvident  gardener  being  dismissed 
from  my  Lady  Bountiful' s  service,  should  fail  to  find 
another  post,  should  get  into  debt,  pay  no  rent,  and  be 
driven  to  apply  to  charity  for  aid,  the  Charitable  Body 
will    thoroughly    investigate    his    case.     The     Lady 
Bountiful  will  be  consulted,  and  if  that  ugly  show  of 
temper  in  which  the  man  indulged  can  be  shown  to  have 
been  an  abnormal  aberration,  something  may  be  done 
to  find  him  fresh  employment.     The  curious  coinci- 
dence that  my  lady  has  dismissed  three  gardeners  in  a 
fortnight  does  not  interest  or  concern  the  Charitable 
Body  in  the  least.     Their  duty  in  such  a  case  is  to 
mind  their  own  business — and  the  business  of  the  poor. 
In  what  light  the  poor  themselves  regard  these  well- 
meaning  efforts,  and  whether  they  accept  them  with  a 
good  grace  or  an  ill,   does  not  concern  us  here.     The 
point  to  be  noted  is  this,  that  the  poor  are  now  held  in 
theory  to  be  a  separate  class,  possessing  a  different 
status  and  requiring  a  different  treatment  from  the  rest 
of  the  community.     Such  a  theory,  if  accepted  by  the 
poor,  may  accustom  them  to  a  tame  submission  and  to 
the  further  acceptance  of  whatever  is  put  upon  them. 
But  it  might  even  so  be  regarded  as  a  harmless   and 
genial  foible  of  the  rich,  were  it  not  that  the  State  itself 
appeared  to  countenance  the  theory.     For  Parliament, 
intent  upon    improving  the  conditions  of  the  poor, 
has  been  not  a  little  influenced  by  energetic  theorists. 
Laws  have  in  fact  been  passed  which  not  only   dis- 


THE  SERVILE  STATE  189 

criminate  between  the  classes,  but  which  even  appear  to 
legitimise  the  difference  of  class  status.     Now  there 
are  many  laws,  it  is  true,  which  of  their  very  nature 
must  apply  to  some  sections  of  the  community  and  not 
to  others- ;    there  must  be  laws  which  regulate  the  acts 
of  milkmen  (in  respect  of  watering  their  milk)  or  of  the 
clergy   (in  respect   of  the  ritual   they  shall   observe). 
But    the    type  of  legislation  with  which  we  are  con- 
cerned, goes  differently  to  work.     It  says  in  effect  to  the 
citizens,  "  I  recognise  that  there  are  among  you  two 
classes,  employers  and  employed.     These  two  classes 
moreover  bear  in  their  life  and  Work  certain  mutual 
relations  towards  each  other.     These  relations  I  shall 
make  it  my  business  to  control,  regulate   and   adjust. 
Your  business  as  citizens  is  to  accept  the  classification 
and  to  behave  accordingly.     You  who  are  employers 
shall  behave  in  such  and  such  a  manner  to  those  in  your 
employ  ;   I  will  draw  up  rules  for  your  direction.     You, 
the  employed,  shall  receive  a  separate  code  of  duties, 
differing  from  those  of  your  employer,  and  made  to  suit 
you  because  you  are  employed.     It  will  be  greatly  to 
your  interest  to  observe  them.' '     Now  legislation  of  this 
sort  has  become  of  late  years  increasingly    common. 
Let  us  take  an  obvious  instance,  the  Act  concerning 
Employers'  Liability.     Under  this  law  the  Employer's 
obligation    is    alone    concerned.     If    any   accident    or 
damage,  whether  due  to  carelessness  or  misadventure, 
should  befall  a  man  working  in  his  employ,  then  he, 
the  employer,  must  compensate  that  Workman  in  such 
a  manner  as  the  State  directs.     The  workman  himself 
has  no  corresponding  duty.     Under  the  Insurance  Act 
however,  the  duties  of  both  parties  are  defined.     The 
employer's    duty  is  to  put  by  a  weekly  sum  for  the 
purchase  of  a  Government  stamp  ;   the  Workman  is  to  do 
the     same  ;     and   out    of   their   combined    payments, 
together  with  some  addition  from  the  taxes,  the  Work- 
man is  provided  with  drugs  and  medical  advice.     In 


igo  NEW  FALLACIES  OF  MIDAS 

the  case  of  either  law,  the  State  has  definitely  accepted 
the  theory  of  class  status,  and  has  legitimised  it  by  a 
differentiation  of  class  duties.  In  either  case,  the 
working  man,  because  he  is  a  working  man,  is  entitled 
to  make  certain  specific  claims  on  his  employer.  It 
should  be  noted,  however,  that  though  equally  engaged 
upon  an  act  of  service  to  another  man,  a  member  of  the 
employer  class,  because  he  is  a  member  of  the 
employer  class  is  entitled  to  make  no  such  claim. 
"  If,"  as  Mr.  Belloc  puts  it,  "  I  contract  to  write  for  a 
publisher  a  complete  History  of  the  County  of  Rutland, 
and,  in  the  pursuit  of  that  task,  while  examining  some 
object  of  historical  interest,  fall  down  a  pit,  I  should  not 
be  able  to  recover  against  the  publisher.  But,  if  I 
dress  in  mean  clothes,  and  the  same  publisher,  deceived, 
gives  me  a  month's  Work  at  cleaning  out  his  ornamental 
water,  and  I  am  wounded  in  that  occupation  by  a 
fierce  fish,  he  will  be  mulcted  to  my  advantage  and  that 
roundly."  Here  then,  albeit  under  a  new  form  and 
with  a  somewhat  different  bias,  is  that  old  familiar 
travesty  of  social  justice,  one  law  for  the  rich  and 
another  for  the  poor. 

But,  though  at  first  sight  this  type  of  legislation 
appears  to  proceed  from  a  socialistic  bias,  and  to 
favour  the  poor  at  the  expense  of  the  rich,  it  may  in 
the  last  resort  produce  the  very  opposite  result.  For 
the  legislator  has  not  yet  fully  disclosed  his  hand. 
Having  firmly  established  the  principle  of  such  legis- 
lation, having  drawn  a  firm  line  between  the  classes, 
and  by  such  baits  as  he  can  offer  having  enticed  the 
working  class  to  an  acceptance  of  their  status,  suppose 
that  he  should  turn  to  them  and  say,  "  It  has  been  my 
habit  for  some  years  past  to  regulate  the  conditions  of 
your  labour.  I  have  seen  to  it  that  you  shall  obtain 
adequate  redress  for  whatever  injury  or  damage  you 
sustain  in  the  performance  of  your  work.  I  have  also 
thought  fit  to  direct  you  concerning  the  duties  of  your 


THE  SERVILE  STATE  191 

station  ;  in  return  for  a  triliing  though  compulsory 
payment,  you  have  received  the  attendance  of  my 
doctors.  In  all  this  I  have  required  more  at  the  hands 
of  your  employers  than  at  yours,  and  they  have  not 
failed  me.  It  is  your  turn  now,  I  propose  that  you 
shall  work  for  the  said  employers  in  perpetuity,  without 
liberty  of  contract  and  at  such  a  wage  as  I  shall  here- 
inafter fix.  Such  an  arrangement  I  need  hardly  say 
will  greatly  ease  the  organisation  of  our  national 
industries  and  secure  our  regular  out-put  of  production 
against  all  vexatious  and  needless  interruption."  No 
legislator,  of  course,  would  ever  put  the  case  in  such 
blunt  words  as  these.  But  it  is  not  difficult  to  foresee 
how  he  may  proceed  to  the  same  end.  First,  he 
enforces  amid  the  acclamations  of  the  poor,  the  pay- 
ment of  a  standard  minimum  wage  ;  so  far  good  ; 
if  the  employers  grumble,  no  matter  Next,  this  will 
very  naturally  be  followed  by  a  general  scheme  of 
compulsory  insurance,  whereby  a  man  out  of  employ- 
ment will  find  himself  supported  by  the  State  (largely 
perhaps  at  the  employer's  expense).  Good  also; 
the  poor  man  is  now  secure  against  every  accident  of 
fate.  Presently,  however,  it  comes  to  light  that  there 
are  certain  indolent  persons  who  finding  the  Unem- 
ployment Benefit  sufficient  for  the  support  of  hfc  (for  in 
justice  to  the  honest  worker  it  could  hardly  be  less)  are 
beginning  to  show  a  sad  distaste  for  work,  and  are 
none  too  eager  in  their  attempts  to  find  a  job.  This 
condition  of  affairs  our  legislator  can  scarcely  tolerate. 
Wastrels  cannot  be  supported  out  of  the  public  funds  ; 
and  there  is  but  one  remedy.  These  men  who  will  not 
work  must  be  compelled.*  If  they  refuse  to  engage 
themselves  to  an  employer  they  must  be  put  under 
official  supervision,  and  sent  to -a  Labour  Colony  or 
whatever  it  be  called.     This  place  of  detention   will 

•  To  withhold  the  payment  of  the  Unemploymont  Benefit  would  be 
compulsion  of  a  more  subtle  sort,  but  not  dili«ring  in  principle. 


192  NEW  FALLACIES  OF  MIDAS 

also  meet  the  case  of  those  who  from  physical  weakness 
or  deficient  intellect  may  be  counted  as  unemployable  ; 
that  is  to  say,  constitutionally  incapable  to  render  such 
amount  of  service  to  a  master  as  a  master  would  hold 
to  be  an  adequate  return  for  the  wage  prescribed  by 
law.  Our  legislator  might  now  pause  from  his  labours. 
Industry  is  settled  upon  so  firm  a  basis  that  nothing 
short  of  a  rebellion  of  the  workers  could  upset  his 
masterly  edifice. 

Such,  according  to  Mr.  Belloc,  are  the  logical  ante- 
cedents of  the  Servile  State.  They  may  proceed  from 
the  motives  of  high  minded  men  who  are  eager  to  do 
the  poor  a  service.  They  may  even  be  welcomed  by  the 
poor  themselves,  preferring  security  of  work  and  a  life 
of  decent  comfort  (for  such  at  least  the  Servile  State 
would  offer  them)  rather  than  the  precarious 
advantages  of  industrial  independence.  But  so 
surely  as  every  favour  is  balanced  by  a  corresponding 
obligation  and  every  right  by  a  duty,  there  can  never 
be  true  liberty  for  those  who  lean  too  much  upon  the 
bounty  of  the  State.  Like  Esau,  they  would  have 
bartered  away  their  birthright  for  a  mess  of  not 
unpalatable  pottage. 

(iii.) 

Thus  comes  the  chance  for  the  Capitalist  who  is  hard 
pressed  by  Socialism,  but  not  beaten,  to  snatch  victory 
from  defeat.  The  very  weapons  with  which  Labour 
comes  armed  against  him,  he  may  turn  against  itself. 
If  Labour  can  initiate  legislation,  so  can  he.  And 
under  the  appearance  of  yielding  to  the  Socialists  he 
may  induce  them  to  play  into  his  hands.  For  though 
here  and  there  he  must  yield  a  little  ground  or  make 
perhaps  even  considerable  concessions,  yet  he  would 
be  repaid  ten  fold  for  what  he  lost.  Under  the  Servile 
State  (could  he  but  bring  it  into  being)  he  would  be 


THE  SERVILE  STATE  193 

no  longer  a  bargain  driver  haggling  and  manoeuvring 
with  Labour,  but  master  absolute.  Instead  of  a 
rebellious,  half  tamed  company  of  workers,  eager  to 
assert  their  independence,  for  ever  demanding  higher 
wages,  calling  strikes  and  quarrelling  with  the  discipline 
of  the  work  shops,  he  Would  now  command  an  army 
of  docile  and  contented  helots.  For  whatever 
advantage  of  treatment  or  condition  the  Workers 
would  have  gained,  they  would  none  the  less  be  slaves, 
bound  by  the  peculiarity  of  their  status  to  a  life  of 
compulsory  toil.  Nor  is  such  a  conjunction  of 
industrial  servility  and  material  well-being  a  mere 
fantasy  of  the  theorist.  Even  in  the  civilisations  of 
antiquity  such  a  thing  was  known.  At  Athens  where 
an  aristocracy  of  free-men  owed  the  ease  and  culture 
of  their  prosperous  lives  to  a  system  of  slave-labour, 
the  slaves  themselves  were  on  the  whole  well  fed,  well 
used  and  tolerably  content.  The  Servile  State  does  not 
of  necessity  involve  a  proletariat  so  degraded  as  the 
serf  labourers  pictured  by  Mr.  Wells  in  "  When  the 
Sleeper  Wakes,"  a  soulless  mass  of  human  mechanism 
dispossessed  of  all  privileges  and  powers,  and  con- 
demned to  toil  in  a  swarming  metropolis  of  engine 
rooms  and  factories  for  the  benefit  of  their  Olympian 
despots  of  the  upper  air.  On  the  contrary,  the 
proletariat  of  the  Servile  State  would  find  their 
happiness  increasing  rather  than  diminished.  Accus- 
tomed by  the  slow  degrees  to  the  restrictive  influences 
of  servile  legislation,  they  would  lose  their  appetite  for 
liberty  and  cease  to  recognise  the  change.  Intent  upon 
the  flesh-pots  of  the  present  they  would  forget  the  lost 
privileges  of  the  past,  and  would  look  back  perhaps  with 
pitying  disdain  to  the  unhappy  epoch  of  King  George 
the  Fifth.  For  to  the  outward  eye,  at  least,  they 
would  hardly  be  distinguishable  from  the  more 
prosperous  among  the  workers  of  to-day. 

Such,  it  would  seem,  is  Mr.  Belloc's  forecast  of  our 


IQ4  NEW  FALLACIES  OF  MIDAS 

destiny.  For  while  most  Englishmen  are  slow  to 
understand  the  deep  and  hidden  issues  of  a  struggle,  he 
with  that  keen  faculty  of  discernment  which  springs 
from  his  French  blood  and  Latin  sympathies,  detects 
the  shifting  breeze  in  every  straw  and  scents  the  coming 
change.  So  he  sees  much  to  which  other  folk  are 
blind.  For  the  Servile  State  does  not  come  with 
observation,  but  by  slow  and  almost  imperceptible 
degrees  ;  so  that  until  its  evolution  is  completed,  men 
might  scarcely  be  aware  of  its  existence.  None  the 
less,  if  Mr.  Belloc  read  the  signs  of  the  times  aright, 
England  in  19 14  was  surely  moving  towards  this 
fatal  end.  How  we  stand  now  and  in  what  fashion  our 
political  development  has  been  changed  or  arrested  by 
the  accidents  of  war,  it  is  almost  impossible  to  tell. 
The  war  has  bred  among  the  working  population  a 
new  and  revolutionary  spirit,  which  aspires  at  most  to 
dominate  the  State,  and  which  claims  at  the  very 
least  to  arrange  the  affairs  of  Labour  in  Labour's  own 
way.  The  working  Trades  Unions  are  now  no  less 
suspicious  of  the  State  officials  than  they  were  of  the 
employer.  Not  merely  will  they  resist  whatever 
attempts  are  made  to  coerce  them  into  submission,  but 
they  will  distrust  all  political  interference,  however 
honestly  intended,  in  the  reorganisation  of  industrial 
conditions.  And  along  with  their  new  consciousness 
of  power  have  come  new  opportunities  for  exerting  it.* 
Owing  to  the  necessities  of  war  practically  the  whole  of 
organised  or  Trades  Union  Labour  has  become  the 
servant  of  the  State.  Working  as  they  do  upon 
production  which  is  essential  to  the  continuation  of 
hostilities,  they  have  been  in  a  position  to  levy  a  kind  of 
blackmail  upon  the  Government  and  to  extort  all 
manner  of  concessions.       The  income  of  this  section  of 

*  The  following  interpretation  of  contemporary  conditions  is  based 
upon  the  articles  contributed  to  the  Tiines  by  a  correspondent  in 
September,  19 17. 


THE  SERVILE  STATE  195 

the  community  has  already  increased  by  upwards  of 
two-thirds.  Nor  have  they  any  intention  of  relinquish- 
ing what  they  have  already  won  ;  on  the  contrary  their 
demands  increase  at  every  step.  They  now  represent 
as  it  were,  a  nation  within  the  nation,  well  organised, 
well  paid  and  still  dissatisfied.  Over  against  this 
Labour  "  nation  "  there  exists  another,  about  its 
equivalent  in  numbers,  not  upon  the  average, 
possessed  of  larger  incomes,  and  entirely  lacking  in  its 
sense  of  unity  and  power  of  co-operation.  The  ranks  of 
this  other  "  nation  "  are  composed  of  various  elements, 
the  employers  (now  themselves  the  servants  of  the 
State)  the  professional  classes,  the  working  men  who 
are  not  organised,  and  the  independent  bourgeoisie. 
These  elements  are  united  only  in  their  common  loyalty 
to  the  State,  and  in  a  vague  determination  to  preserve 
its  authority  against  the  tyrannical  claims  of  the 
revolutionary  faction.  In  other  words,  the  old  classi- 
fication of  Capital  and  Labour  has  ceased  for  the  present 
to  exist  ;  and  the  struggle  lies  now  no  longer  between 
the  employers  and  the  employed,  but  between  the 
close  knit  army  of  organised  producers  on  the  one  hand 
and  this  heterogeneous  medley  of  independent  citizens 
on  the  other.  Upon  the  issues  of  this  struggle  all  hopes 
of  an  orderly  and  stable  settlement  depend.  If  Labour 
is  reasonable,  if  it  acts  with  restraint,  and  if  it  is  content 
to  trust  its  Parliamentary  spokesmen  and  attain  its 
ends  by  regular  and  constitutional  methods,  then  it 
may  shape  its  own  destiny  and  win  both  security  and 
comfort  without  sacrifice  of  its  industrial  liberty. 
If  however,  it  prcsftmes  upon  its  monopoly  and  presses 
its  demands  too  far,  worse  still,  if  it  should  appeal  to 
force,  establish  mob  rule  and  wrest  all  control  of 
policy  from  the  hands  of  its  recognised  leaders,  then 
the  consequences  will  be  more  doubtful  and  more 
perilous.  For,  when  things  have  come  to  such  a  pass 
there  can  be  no  turning  back.     The  strength  of  the 


196  NEW  FALLACIES  OF  MIDAS 

two  "  nations  "  must  be  put  to  a  decisive  test. 
Whether  victory  will  lie  with  the  Individualist  section, 
rallying  to  the  support  of  Government  for  the  preserva- 
tion of  the  State,  or  whether  it  may  incline  (for  the 
time  at  least)  to  the  forces  of  revolutionary  Labour, 
we  cannot  tell.*  But  this  much  we  may  safely  guess, 
that  Labour  having  forfeited  all  claim  to  a  liberty 
which  it  had  so  abused,  could  not  be  received  again 
into  State  except  upon  most  binding  and  perhaps 
humiliating  terms.  Defeated,  it  must  submit  to  such 
conditions  as  would  compel  it  for  the  future  to  the 
proper  and  orderly  performance  of  its  duties.  Its  old 
privilege  of  industrial  independence  would  be  abro- 
gated ;  the  strike  perhaps  forbidden  ;  the  terms  and 
conditions  of  employment  regulated  by  statutory  law, 
and  if  behind  the  law  stood  Capital  victorious  and 
dominant,  the  sequel  would  not  be  in  doubt  ;  we 
should  have  the  Servile  State.  Nor  would  it  be  the 
first  time  that  revolution  has  been  followed  by  like 
reaction  and  an  excess  of  liberty  has  led  to  its  opposite 
extreme. 


*  Perhaps  it  would  be  moi-e  honest  to  say  that  we  think  we  can.  All 
past  experience  of  English  character  goes  to  prove  th  at  the  revolutionary 
section  would  stand  very  little  chance  of  even  temporary  success. 
It  is  not  merely  the  Individualist  section  that  would  combine  against 
it.  Organised  Labour  itself  would  be  utterly  opposed  to  mob-rule 
such  as  we  have  seen  in  Rus.sia.  The  authorised  leaders  of  the  Unions 
would  resist  anarchy  with  all  their  power  and  would  even  be  prepared 
to  take  office  to  avert  it.  For  this  reason  whether  as  an  estimate  of  the 
present  situation  or  as  a  forecast  of  the  future,  the  thesis  quoted  above 
is  probably  erroneous.  It  assumes  far  too  lightly  that  the  Labour 
movement  as  a  whole  can  be  identified  with  the  revolutionary  parts  of 
it.  It  may  be  true  perhaps  that  in  some  cases  its  leaders  are  out  of 
touch  with  the  ambitions  and  ideas  of  the  rank  and  file  who  thus  get 
out  of  hand.  They  are  often  too  old  and  their  opinions  out  of  date. 
But  this  is  in  fact  due  largely  to  the  conservative  instincts  of  the  British 
working  man,  who  will  not  willingly  discard  a  trusted  and  well-tried 
representative,  even  when  he  is  no  longer  a  true  leader  in  thought  or 
action.  But  the  very  same  instinct  which  produces  this  anomaly,  mil 
undoubtedly  serve  to  check  the  more  eager  and  unbalanced  spirits  who 
seek  to  take  undue  advantage  of  it. 


Chapter  XV 
SYNDICALISM  OLD  AND  NEW 

(i) 

But  how,  if  the  decision  should  fall  the  other  way  ? 
If  Labour  were  victorious  what  use  would  it  make  of 
victory  ?  Could  the  Unions  hope  to  build  up  the 
industrial  and  political  edifice  afresh  on  the  ruins  of  the 
Capitalist  past  ?  Are  they  ready  to  construct  as  well 
as  to  destroy  ?  To  these  questions  Syndicalism 
provides  the  answer. 

When  Syndicalism  first  emerged  into  English  day- 
light, it  came  with  an  air  of  mystery  and  an  obscure 
menace  of  revolutionary  troubles.  The  respectable 
citizen,  puzzled  by  its  unfamiliar  name  and  disturbed 
by  the  omens  of  the  great  railway  strike  in  191 1, 
denounced  it  vaguely  without  being  well  aware  what 
manner  of  thing  it  was.  But  fuller  knowledge  more 
than  confirmed  his  fears.  Syndicalism,  as  he  saw  it, 
possessed  all  the  worst  vices  of  Socialism,  with  none  of 
its  merits.  That  the  control  of  Industry  should  pass 
into  the  keeping  of  the  State,  he  had  considered  as 
hazardous,  but  not  as  an  unthinkable  proposition  ; 
but  that  the  workers  themselves  should  lay  their  untried 
hands  upon  that  tremendous  power,  this  seemed  to 
strike  at  the  very  foundations  of  social  stability  ; 
in  the  respectable  citizen's  eyes  it  meant  the  sure  ruin 
of  England.  But  if  such  doubts  and  fears  were  felt 
by  the  middle  classes  and  even  by  the  more  conserva- 
tive among  the  working  men,  the  go-ahead  Unionist 
did  not  share  them.     He  was  already  tiring  of  Socialistic 

«97 


198  NEW  FALLACIES  OF  MIDAS 

propaganda,  and  disheartened  by  the  slow  progress  of 
Socialistic  policy,  perhaps  more  than  a  little  frightened 
too  at  the  practical  results  of  Socialistic  legislation. 
He  was  beginning  to  realise  that  by  embracing  Socialism 
he  would  effect  nothing  but  a  change  of  masters,  and 
that  in  the  long  run  the  little  finger  of  the  State  might 
well  prove  thicker  than  the  Capitalist's  loins.  The 
promise  of  Syndicalism  offered  a  different  and  more 
tempting  prospect.  Once  let  its  claims  be  carried  into 
practice,  and  he  would  be  beyond  denial  his  own  master. 
Give  the  workers  the  control  of  the  workshops  and  they 
would  achieve  at  a  bound  all  the  ends  for  which  they 
had  recently  been  fighting  (for  of  late  years  it  had  been 
workshop  conditions  far  more  than  wages  which  had 
been  the  point  of  issue  with  the  masters).  Last  and 
not  least,  rid  industry  once  and  for  ever  of  the  Capitalist 
exploiter,  and  the  whole  profits  of  industry  would 
henceforward  go  direct  to  the  men  whose  labour  had 
produced  them.  In  the  face  of  such  proposals,  it  is 
small  wonder  that  the  respectable  citizen  felt  nervous 
and  perplexed. 

Syndicalism  was  first  born  among  the  French.  To 
that  quick-witted  high-spirited  people,  a  theory 
approved  is  no  longer  a  theory  but  a  passion  and  an 
enthusiasm.  So  Syndicalism,  like  the  democratic  ideal 
of  the  Revolution,  soon  became  the  French  working 
man's  religion,  to  be  preached  and  practised  with 
fanatical  devotion.*  Once  convinced  that  Labour's 
only  hope  lay  in  the  Capitalist's  destruction,  the 
Syndicalists  lost  no  time  in  declaring  on  all  property 
and  all  masters  a  truceless  and  perpetual  war.  It  is  a 
war  in  which  no  concessions  can  be  accepted  as 
adequate,  no  promise  considered  to  be  final,  in  which  no 

*  It  must  however  be  remembered  that  the  organised  labour  of 
France  is  numerically  weak.  The  membership  of  the  Unions  or 
Syndicats  is  little  over  one  milhon  as  against  four  or  more  in  England. 
After  all  France  is  still  in  the  main  an  agricultural  countr}'. 


SYNDICALISM  OLD  AND  NEW  199 

weapons  may  be  neglected  which  might  ensure  success, 
and  no  agreement  kept  when  it  is  better  broken.  The 
campaign  will  be  long  and  bitter  ;  but  it  will  move, 
so  Syndicalists  declare,  to  a  grand  and  victorious  climax, 
in  which  by  some  vast  revolutionary  upheaval  the 
powers  of  Capital  will  at  last  be  vanquished  and  over- 
thrown, and  Labour  emerge  the  lord  and  master  of  its 
own  destiny.  Then,  all  rights  of  ownership  will  be 
abolished,  all  property  be  vested  in  the  great  organised 
Unions  of  productive  labour.  This  step  appears  to 
them  both  inevitable  and  right ;  for,  inasmuch  as  the 
eternal  and  fundamental  necessity  of  life  is  to  produce, 
nothing  can  in  the  long  run  withstand  the  producer's 
claim  to  manipulate  the  world.  As  for  the  State,  the 
Syndicalist  will  find  no  further  use  for  this  meddlesome 
busy-body,  which  does  but  hamper  the  freedom  of 
economic  man  with  its  outworn  traditions  and  irre- 
levant side  issues.  Therefore,  lest  it  should  seek  to 
interfere  with  the  new  born  scheme  of  things,  the  State 
too,  like  the  master,  must  be  swept  away.  For 
Syndicalism  (in  its  most  violent  form  at  least)  rejects 
all  ties  of  race,  country  or  religion.  It  sees  nothing  in 
life  but  the  struggle  for  bread,  nothing  in  history  but 
the  ebb  and  flow  of  markets.  It  is  as  though  the 
hands  and  the  belly  had  conspired  together  to  deny 
the  existence  of  the  head  and  heart. 

Frenchmen  will  die  for  a  theory  ;  but  Englishmen 
have  always  regarded  theories  with  cautious  suspicion. 
Show  them  that  a  scheme  will  work  and  they  may 
perhaps  be  brought  to  believe  in  it,  but  even  so  they 
will  be  slow  to  put  it  to  the  test  of  practice.  Not  that 
the  English  working  man  is  lacking  in  idealism  ;  on 
the  contrary  it  is  his  very  idealism  that  saves  him  from 
being  carried  off  his  feet  by  a  one-sided  truth  ;  it  tells 
him  that  economic  man  is  not  the  whole  man  ;  it 
tells  him  that  bread  and  butter  is  not  the  sole  end  of 
life.     The  claims  of  nationality  are  binding  on  him  yet  ; 

14 


200  NEW  FALLACIES  OF  MIDAS 

and  even  before  he  suffered  the  stern  schooling  of 
war,  he  had,  as  a  rule,  more  sense  than  to  deny  them. 
So  Syndicalism  of  the  more  fantastic  and  visionary 
type,  which  would  sweep  away  national  boundaries 
and  destroy  the  authority  of  religion  and  of  State,  can 
never  take  root  deeply  here  in  England.  Hot-headed 
enthusiasts  may  use  its  more  exaggerated  doctrines 
to  foment  disturbance  and  unrest  ;  it  may  suit  agitators 
to  represent  the  State  as  the  Capitalist's  friend  and  the 
working  man's  natural  foe  ;  and  for  a  while  perhaps 
the  masses  may  believe  them.  But  the  saner  apostles 
of  English  Syndicalism  are  not  deceived  by  such 
nonsense.  They  know  well  enough  that  the  State  in  a 
democratic  country  is  neither  the  friend  nor  the  foe  of 
the  people  ;  for  it  is  the  people  itself.  So  they  see 
that  Syndicalism  too  will  need  the  State,  and  that  if  it 
seeks  to  destroy  the  constitutional  fabric  it  will  work 
sheer  chaos.  Without  the  mediating  and  restraining 
influence  of  centralised  authority,  the  different  groups 
of  workers  would  speedily  fall  to  quarrelling.  The 
policy  of  one  group  would  clash  with  the  policy  of 
another ;  builders  would  turn  against  agriculturists 
and  transport  workers  be  the  enemy  of  both. 
Divergent  interests  would  drive  them  into  bitter 
antagonism,  and  the  strongest  group  would  make  of  its 
monopoly  an  instrument  for  the  tyrannical  subjection 
of  the  rest.  Orderly  government  is  a  necessary  con- 
dition of  economic  prosperity  no  less  than  of  political 
security.  There  must  be  supreme  authority  to  con- 
sult for  the  general  interest,  and  execute  the  general 
will  ;  and  supreme  authority  is  helpless  without  force 
to  back  it.  If  the  State  did  not  exist,  Syndicalist 
society  would  be  under  compulsion  to  invent  it. 

According  to  our  wiser  Syndicalists  therefore  the 
State  must  be  supreme,  supreme  not  only  to  save  the 
producers  from  suicidal  competition,  but  also  to  watch 
over  the  consumer's  interest.     In  other  words  it   must 


SYNDICALISM  OLD  AND  NEW  201 

exercise  a  general  control  over  production  and  to  this 
end  it  will  need  wide  powers.  First,  it  must  own  the 
sources  of  production.  If  property  is  a  crime  against 
society,  there  can  be  no  reason  under  heaven  why  the 
miners  should  possess  the  mines  ;  nor  if  they  did,  could 
anything  prevent  them  from  misusing  their  privilege. 
Half  the  industries  of  the  country  would  be  wholly  at 
their  mercy  ;  and  their  monopoly  would  be  as  dangerous 
and  despotic  as  the  power  of  some  great  Trust. 
Nationalisation  therefore,  must  be  the  first  condition 
of  Syndicahst  success.  And  secondly,  the  State  must 
control  the  character  of  the  output  and  its  price. 
Obviously  it  is  for  the  consumer  to  say  both  what  he 
requires  and  how  much  he  is  prepared  to  pay  for  it  ; 
and  it  will  be  the  State's  business  as  the  consumer's 
representative  (since  all  its  citizens  are  consumers) 
to  meet  their  wishes  and  arrange  with  the  producers 
accordingly.  Not  that  the  interests  of  the  latter  will  be 
overlooked.  The  producers  are  citizens  also  ;  and  the 
State  will  not  demand  impossibilities ;  nor  will  it 
seek  in  regulating  prices  to  rob  the  workman  of  his  due. 
Payments  will  correspond  with  the  value  of  service 
rendered  ;  in  proportion  as  each  Trade  gives,  in  the 
same  proportion  it  will  also  receive.  But  the  reward  of 
production  will  no  longer  be  dependent  on  the  accidents 
of  supply  and  demand,  nor  vary  with  fluctuations  of 
the  market.  Every  service  will  have  its  settled  price  ; 
and  the  wage  system  as  we  know  it  will  disappear 
altogether. 

But  having  settled  what  goods  shall  be  delivered  and 
upon  what  terms,  the  State  (so  they  say)  must  interfere 
no  further.  In  what  manner  and  under  what  con- 
ditions the  goods  shall  be  produced  is  the  producer's 
business  and  may  be  left  to  the  producer  to  control. 
The  whole  internal  economy  of  industry  therefore  will 
remain  in  the  hands  of  the  Unions.  Each  Union, 
extended  now  to  embrace  an  entire  Trade  (or  even  a 


202  NEW  FALLACIES  OF  MIDAS 

group  of  kindred  Trades)  will  be  master  in  its  own 
house.  In  all  matters  of  detail  the  members  of  the 
Union  will  have  their  say.  They  will  elect  stewards 
and  foremen  who  will  be  responsible  for  the  discipline 
of  the  workshop,  and  they  will  nominate  the  managers 
who  will  undertake  the  wider  duties  of  supervision  and 
control.  They  will  have  a  deciding  vote  upon  questions 
of  promotion  or  admission  or  dismissal,  as  well  as  in  the 
settlement  of  working  hours,  holidays,  terms  of  appren- 
ticeship and  conditions  of  employment  generally. 
Over  matters  of  larger  policy,  where  technical  know- 
ledge is  required,  the  delegates  of  the  various  workshops 
will  meet  in  consultation.  These  delegates  will  fix 
the  scale  of  salaries  and  wages,  whereby  the  profits  of 
the  business  are  fairly  apportioned  to  different  grades 
of  workmen.  They  will  employ  the  advice  of  experts 
in  the  choice  of  processes  and  machinery.*  and  lastly, 
they  will  act  as  a  connecting  link  between  the  Union 
and  the  State.  Thus  organised  each  industry  will 
become  as  it  were  a  miniature  republic,  administered  in 
ways  of  its  own  pleasure,  and  governed  by  officers  of 
its  own  choice.  Authority  will  be  delegated  from 
below,  and  not  imposed  from  above.  The  producers 
will  be  the  willing  servants  of  the  community,  but  not 
its  slaves.  In  short,  the  true  emancipation  of  Labour 
will  be  reached  not  through  the  numbing  officialdom 
of  State  control,  but  through  the  living  democracy  of 
the  workshop. 


*  The  workers  have  not  in  the  past  shown  themselves  good  judges 
of  the  value  of  invention.  The  fear  is  always  present  with  them  lest  a 
new  machine  may  set  their  skill  at  a  discount  and  throw  a  proportion 
of  them  at  least  out  of  employment.  But  the  consumer's  interest 
does  not  allow  of  the  retention  of  old-fashioned  and  un-economical 
processes.  Therefore,  as  Mr.  G.  D.  Coles  suggests,  the  consumer  must 
have  a  voice  here  ;  and  the  control  of  this  department  of  industry  might 
profitably  be  shared  by  the  representatives  of  the  State  as  well  as  of  the 
Unions. 


1 


SYNDICALISM  OLD  AND  NEW  203 

(ii.) 

Such  a  scheme,  blending  as  it  were  both  Socialism  and 
Syndicalism  in  one,  is  far  more  reasonable  and  far  more 
practicable  than  the  vague  propositions  of  the  French. 
It  has  been  forrnulated  and  even  sketched  in  detail  by 
up-to-date  economists,  who,  harking  back  to  the  history 
of  the  Middle  Ages,  would  give  to  their  great  Industrial 
Unions  the  more  familiar  and  national  name  of  Guilds. 
It  is  an  idle  fancy  to  summon  dead  ghosts  out  of  the 
past  ;  and  to  recall  historical  precedents  will  not  in 
reality  help  us  much  in  the  solution  of  modern  diffi- 
culties. Nevertheless,  though  the  actual  mechanism 
of  the  mediaeval  guilds  would  scarcely  lit  into  the 
framework  of  contemporary  industry,  yet  there  is 
muchiin  this  theory  of  Guild  Socialism  which  would 
meet  the  needs  of  the  working-man  of  to-day.  For  his 
present  discontent  arises  from  social  as  much  as  from 
economic  causes.  He  is  cosncious  now  that,  whatever 
his  political  status  may  be,  he  is  still  in  some  sense  a 
slave.  He  retains  his  job  or  loses  it  at  a  master's 
pleasure;  submits  to  the  precarious  justice  of  a  foreman 
whom  a  master  has  appointed  to  order  him  about  ; 
toils  at  a  task  prescribed  according  to  a  master's 
methods  and  under  a  master's  rules,  and  performed  to 
swell  withall  the  profits  of  a  master's  purse.  Worse 
still,  this  master  is  a  person  he  does  not  know,  perhaps 
has  never  met  ;  a  vague  invisible  authority  which 
controls  its  workmen,  like  so  many  marionettes,  from 
behind  the  scenes.  Often  this  master  is  not  even  one 
man,  but  many,  a  scattered  company  of  shareholders 
who  feel  no  interest  in  their  employees'  welfare  and  to 
whom  their  employees  can  make  no  direct  appeal. 
And  for  these  men  he  must  perform  a  narrow  round 
of  exacting  duties  which  offer  little  scope  for  indepen- 
dence or  ambition.  Such  a  system  will  not  conquer  the 
spirit  of  the  more  robust  ;    but  the  weaker  brother  is 


204  NEW  FALLACIES  OF  MIDAS 

simpl}^  crushed  by  it ;  in  working  hours  he  can  scarcely 
call  his  soul  his  own  ;  and  he  feels  (as  one  man  himself 
expressed  it)  "  like  a  rat  in  a  trap."  It  is  not  surprising 
therefore  that  the  average  working-man  regards  his 
routine  of  labour  as  so  much  uncongenial  drudgery. 
It  is  a  good  sign  and  not  a  bad  sign  that  he  is  out  of 
patience  with  his  lot  ;  for  his  impatience  springs  from 
an  inarticulate  desire  to  find  in  his  day's  work  some 
fuller  realisation  of  himself,  and  to  control  by  his  own 
will  and  choice  that  which  is  after  all  the  main  business, 
and  which  ought  to  be  the  main  interest  of  his  life. 
Yet  there  is  no  royal  road  to  industrial  happiness  ; 
and  it  would  be  idle  to  pretend  that  the  path  of  Guild 
Socialism  could  all  be  smooth.  Not  even  Labour  would 
find  it  easy,  for  example,  to  serve  two  masters  ;  and 
between  State  and  Guild  disagreements  would  be 
certain  to  arise.  Under  any  such  system  of  dual 
control,  there  must  be  border  line  questions  over  which 
debate  might  lead  to  friction,  friction  to  antagonism, 
and  antagonism  to  a  trial  of  strength.  So,  too,  between 
the  different  Guilds  there  would  still  be  room  for 
jealousy  and  competition  ;  for  even  when  the  motive 
of  profit  making  is  done  away,  there  remains  many  a 
possible  bone  of  contention,  apprentices  to  be  selected, 
sites  of  factories  to  be  chosen,  machinery  to  be  procured. 
All  this  would  call  for  much  tact  and  statesmanlike 
restraint  among  the  chosen  leaders  of  the  Guilds  ; 
and  of  this  they  may  easily  fail.  The  history  of  their 
mediaeval  prototypes  will  hardly  prove  that  such 
corporations  must  always  of  necessity  possess  the 
high  disinterested  souls  which  some  would  picture. 
Nor  does  the  past  history  of  Trades  Unionism  itself 
offer  any  sure  guarantee  of  honourable  and  orderly 
behaviour.  There  are  overmany  blots  upon  that 
record,  reminding  us  of  pledges  broken,  contracts 
cancelled,  and  leaders'  authority  defied,  of  demands  too 
often   pressed   without   regard   to   public   interest,    or 


SYNDICALISM  OLD  AND  NEW  205 

sense  of  due  proportion,  of  deliberate  fomentation  of 
class  antagonism,  and  even  of  open  contempt  for  all 
ties  of  nationality  and  all  duties  of  citizenship.  Yet 
does  not  the  cause  of  all  this  lie,  at  bottom,  in  the  long 
standing  feud  with  the  employer  ?  and  if  the  cause  were 
removed,  may  not  we  hope  that  a  better  spirit  would 
prevail  ?  Even  now  there  is  a  bright  side  as  well  as  a 
dark  to  the  Trades  Union  record.  The  English  labourer 
can  be  generous  to  a  fault,  when  his  own  people  are 
concerned.  He  will  "  doWn  tools  "  and  accept  the 
loss  quite  cheerfully  in  support  of  causes  which 
(directly  at  least)  are  not  his  own.  When  fellow 
workers  are  on  strike  and  starving,  he  has  been  known 
to  send  them  food,  and  the  self-imposed  restrictions 
upon  earnings  are  proof  that  in  the  policy  of  the  Unions 
the  interest  of  the  weaker  brethren  is  not  forgotten. 
It  will  require  no  doubt  many  years  of'education  and 
experience  before  the  self-governing  workshops  can 
achieve  complete  success  ;  but  where  self  government 
has  already  been  attempted,  the  men  have  proved 
themselves  good  judges  in  the  choice  of  officers.  And, 
even  if  at  times  they  have  thrown  their  leaders  over, 
they  are  not  the  only  sinners,  politicians  have  been 
known  to  do  the  same.  In  short,  there  is  reason  enough 
for  confidence  in  the  future  of  British  Labour  ;  and  it 
is  after  all  a  poor  compliment  to  British  character  if 
the  masses  must  be  thought  incapable  of  loyal 
obedience,  or  unfit  to  be  entrusted  with  the  use  of 
power. 

To  withhold  power  from  men  for  fear  of  its  abuse 
is  always  the  argument  of  the  faint  heart  ;  for  only  by 
the  exercise  of  power  can  the  proper  use  of  it  be  learnt. 
Nobody  can  learn  to  swim  who  is  not  allowed  to 
enter  the  water  ;  and  Democracy  in  industry  as-in 
politics,  must  always  be  in  some  degree  a  leap  in  the 
dark.  So  one  day, — it  may  be  soon  or  it  may  be  late 
— the  reward  will  be  found  worth  the  venture  ;   for  the 


2o6  NEW  FALLACIES  OF  MIDAS 

reward  is  sure.  Towards  the  formation  of  human 
character  and  the  promotion  of  human  happiness 
industrial  democracy  will  do  more  than  political 
democracy  has  ever  done.  The  mere  exercise  of  a 
vote  in  the  choice  of  officers,  the  planning  and  dis- 
cussion of  the  details  of  workshop  policy  would  train 
men  as  nothing  else  could  in  true  independence  of 
judgment  and  true  self-discipline  of  choice.  The  more 
too  a  man  is  free  to  govern  and  direct  the  circumstances 
under  which  he  works,  the  greater  will  be  his  interest 
and  satisfaction  in  that  work.  This  sense  of  freedom 
was  what  gave  to  the  Athenian  and  mediaeval  craftsmen 
their  astonishing  pride  and  pleasure  in  their  work.  It 
is  often  supposed,  but  quite  wrongly  so,  that  the  Greeks 
despised  all  manual  toil.  What,  in  reality,  they  hated, 
was  to  give  out  their  services  on  hire,  in  a  word,  to 
turn  themselves  into  wage-slaves.  Free  independent 
craftmanship,  which  left  him  free  to  work  at  his  own 
time  and  in  his  own  way,  the  Athenian  honoured  and 
practised  with  cheerful  energy.  Now  it  is  true,  under 
modern  conditions,  such  complete  independence  is  no 
longer  possible.  The  work  of  our  industries  is  highly 
organised  and  demands  the  strict  co-operation  of 
trained  teams  ;  its  discipline  leaves  little  room  for 
individual  liberties  and  whims.  But,  discipline,  where 
it  is  the  discipline  of  spontaneous  choice,  is  often  the 
making  of  a  man.  It  was  a  volunteer  in  Kitchener's 
army  who  discovered  that  even  military  routine  gave 
a  fresh  meaning  to  life,  and  that  the  individuality 
which  is  lost  in  a  crowd  may  be  found  in  a  battalion. 
Even  the  monotony  of  such  labour  (and  in  the 
specialised  processes  of  modern  industry  monotony 
can  scarcely  be  avoided)  might  be  mitigated  by  a  sense 
of  freedom  ;  and,  however  toilsome  a  task  may  be,  it 
is  often  to  be  redeemed  by  the  spirit  in  which  it  is  done. 
Work  performed  in  a  dull  spirit  of  slavish  drudgery  can 
never  be  happy  work  ;    work  given  in  the  willing  spirit 


SYNDICALISM  OLD  AND  NEW  207 

of  spontaneous  service  is  its  own  reward.  The 
attitude  of  mind  is  more  than  half  the  battle  ;  and 
nothing  is  more  certain  than  that  a  system  which  works 
(as  the  present  system  does)  against  the  grain  of  human 
nature,  cannot  endure  for  ever.  So  long  as  the 
employees  feel  that  they  are  merely  profitable  tools 
in  the  employer's  hands,  there  can  be  no  final  remedy 
for  the  prevailing  discontent. 

There  remains  perhaps  a  doubt,  and  a  reasonable 
doubt,  whether  industry  conducted  on  Syndicalist 
lines  would  be  so  successful  or  efficient  as  it  is  under 
Capitalist  control.  An  autocracy  can  always  accom- 
plish much  that  democracies  are  helpless  to  attempt 
and  Kaiserdom  is  a  more  powerful  instrument  of 
material  success  than  a  republic.  And  it  must  be  the 
same  with  industry.  It  will  be  long  for  instance 
before  the  self-governing  guild  could  bring  the  right 
men  into  positions  of  command  and  still  longer  before 
it  could  learn  to  render  them  implicit  trust  and  loyal 
obedience.  Nor  could  we  expect  from  these  elected 
leaders  the  enterprise,  the  initiative,  the  "  push  and 
go  "  which  is  thought  to  be  the  special  virtue  of  the 
independent  business  magnate.  A  manager  who  is 
answerable  to  a  jealous  body  of  constituents  cannot 
indulge  in  hazardous  experiments  or  embark  upon  far 
reaching  schemes  on  his  own  responsibility.  So  we 
cannot  but  question  the  power  of  Syndicalism  to 
ensure  economic  prosperity  :  nor  avoid  altogether  a 
fear  lest  it  should  turn  the  wheels  of  progress  back. 
Yet  to  admit  or  rather  to  approve  this  doubt  is  simply 
to  condone  the  false  ideals  of  the  past.  It  was  the 
Manchester  School  who  taught  us  to  place  our  whole 
trust  in  individualist  enterprise,  and  to  pursue  effi- 
ciency at  whatever  cost.  Too  often  their  efficiency 
meant  nothing  else  but  self-aggrandisement  and  their 
boasted  enterprise  the  loss  and  ruin  of  other  men. 
Much  of  their  energy  was  directed  to  unworthy  ends, 


2o8  NEW  FALLACIES  OF  MIDAS 

the  defeat  of  a  rival  firm,  the  deception  of  a  credulous 
public,  or  the  exploitation  of  some  tropical  region  which 
would  have  been  better  and  happier  if  left  untouched. 
Their  philosophy  was  the  philosophy  of  the  old  adage 
that  "  those  should  take  who  have  the  power  and  those 
should  keep  who  can,"  and  their  economic  policy  was 
in  essence  the  same  as  the  political  creed  of  the  dis- 
credited Jingo.  But  just  as  Democracy  has  now 
repudiated  the  old  methods  of  diplomacy,  and  the 
spirit  of  mutual  tolerance  and  co-operation  is,  as  We 
hope,  to  supersede  the  traditional  selfishness  of  nations, 
so  the  ideals  of  business  also  may  be  changed.  The 
morality  of  the  counting  house  need  not  perpetuate  the 
bankrupt  morality  of  kings  ;  and  the  days  may  yet 
come  when  the  crude  gospel  of  individualism  will 
cease  to  be  the  unchallenged  creed  of  commerce,  and 
when  to  "make  money"  and  to  "get  on"  are  no 
longer  considered  the  sole  criterion  of  success. 
Germany  has  taught  us  that  efficiency  does  not  of 
necessity  mean  virtue  nor  even  happiness  ;  and  if  we 
believe  that  through  freedom  men  may  come  to  lead 
more  useful  and  more  worthy  lives,  then  all  the  mis- 
takes and  failures  which  freedom  must  bring  with  it 
need  never  shake  our  faith.  Democracy  may  be  unable 
to  make  good  one  half  of  all  its  promises  ;  it  may  not 
spread  peace  and  goodwill  over  the  world  ;  it  may  not 
bring  the  best  brains  to  the  front  ;  it  may  not  make 
everybody  rich.  But  this  much  it  can  claim  beyond  all 
denial;  that  it  offers  to  every  individual  what  no  other 
system  can,  the  double  opportunity  of  personal  liberty 
and  public  service  ;  in  which  combination  is  embraced 
the  whole  duty  of  man.  At  any  rate  we  are  pledged 
to  democracy  now,  and  it  is  too  late  to  return  upon  our 
tracks.  If  in  truth  we  are  to  distrust  the  people's 
right  to  manage  their  own  affairs,  then  for  three  years 
We  have  been  fighting  on  the  wrong  side.  If  freedom 
is  a  mistake  and  democracy  a  failure,  the    Germans 


SYNDICALISM  OLD  AND  NEW  209 

were  right  after  all  ;  and  the  allied  nations  who  have 
followed  an  illusion  are  of  all  men  the  most  miserable. 
Nevertheless,  though  Syndicalism  is  in  one  sense  the 
natural  and  logical  development  of  democratic  prin- 
ciples as  applied  to  industry,  yet  in  another  sense  it 
may  be  found  to  violate  something  to  which  even  the 
rights  of  the  majority  are  not  superior,  I  mean  the 
rights  of  man.  For  while  it  offers  much  liberty  with 
one  hand,  it  takes  away  more  with  the  other  :  it 
delivers  the  weak  from  the  tyranny  of  the  strong  only 
to  enthrall  both  strong  and  weak  alike  to  the  tyranny 
of  a  system.  When  Syndicalism  claims  to  solve  the 
industrial  quarrel  of  modern  times  by  removing  the 
privilege  of  property  from  individual  hands,  it  is 
destroying  a  liberty  which  has  been  perhaps  more 
permanently  and  deeply  rooted  in  our  economic  life 
than  any  other.  Such  a  liberty  is  open  to  abuse;  and 
abused  it  certainly  has  been.  The  Syndicalist  has  made 
a  protest  which  must  be  heard  and  will  be  heard  in  part. 
But  like  most  enthusiasts  he  overstates  his  claim  ;  and 
whatever  justice  we  may  acknowledge  in  his  champion- 
ship of  the  producers'  rights,  yet  when  he  attacks  the 
rights  of  ownership,  we  cannot  but  doubt  the  wisdom 
and  the  justice  of  so  violent  a  departure  from  a  tradition 
which  is  almost  as  old  as  man  himself.  For  in  the  slow 
growth  of  ages,  there  is  more  than  the  wit  of  a  few 
enthusiasts  or  the  impatience  of  a  single  generation 
can  replace  ;  and  an  edifice  which  has  taken  centuries 
to  build  may  crumble  in  a  night-time,  when  the 
corner-stone  is  once  removed. 


Chapter  XVI 
THE  RIGHTS  OF  THE  INDIVIDUAL 

(i.) 

It  is  perhaps  the  strangest  paradox  of  human  progress 
that  as  our  "  freedom  broadens  slowly  down  from 
precedent  to  precedent, "  the  circle  of  our  individual 
liberties  grows  narrow  and  more  narrow.  The  citizen 
of  a  modern  state  knows  none  of  the  licence  which  his 
primitive  and  savage  ancestor  enjoyed.  If  he  meets 
his  adversary  in  Fleet  Street,  he  may  not  beat  him  on 
the  head  with  his  umbrella,  or  relieve  him  of  his  ready 
cash  ;  he  may  not  even  call  him  names.  The  shackles 
of  law  and  convention  hamper  his  liberty  at  every  turn  ; 
and  in  every  detail  of  his  life  ;  it  is  forbidden  him  to 
sleep  out  at  night  in  public  places,  to  gamble  in  the 
railway  train,  or  to  shoot  his  rubbish  from  Westminster 
Bridge.  And  every  year  sees  new  acts  placed  upon 
the  statute  book,  fresh  regulations  added  to  the  bye- 
laws.  So  the  list  lengthens  ;  and  we  pursue  the 
phantom  of  liberty  by  augmenting  the  criminal  code. 
Now  the  passion  for  order  and  uniformity  is,  like  most 
things,  wholesome  enough  in  moderation  ;  yet  it  is 
very  dangerous  when  pressed  too  far.  If  I  procure  the 
passage  of  a  law  to  restrain  my  neighbour's  actions, 
it  is  well  to  remember  that  I  place  myself  and  all  other 
citizens  under  a  like  restraint,  and  that  in  our  zeal 
to  punish  the  misuse  of  freedom  in  others  we  are  only 
too  likely  to  check  the  fount  of  freedom  in  ourselves. 


THE  RIGHTS  OF  THE  INDIVIDUAL      211 

Legislation  which  is  intolerant  of  all  extremes,  and 
which  makes  an  undiscriminating  attack  on  every 
divergence  from  the  normal  code,  is  apt  to  kill  just 
where  it  seeks  to  cure  ;  and  when  the  liberties  of  the 
citizen  are  protected  against  all  possible  infringement, 
it  may  be  found  too  late  that  no  liberties  are  remaining 
to  protect.  There  is  a  telling  satire  on  this  type  of 
legislation  in  one  of  Mr.  Chesterton's  poems,  which 
describes  the  sufferings  inflicted  by  the  tribe  of  meddle- 
some reformers  upon  an  inoffensive  citizen  named 
Jones.  This  Jones  possessed  a  dog,  which  at  first  he 
kept  chained  up  in  his  back-yard  ;  but  in  so  doing,  he 
unwittingly  aroused  the  jealous  zeal  of  the  reformers. 
First  he  was  compelled  to  set  the  dog  at  liberty  ;  then, 
because  it  barked  at  motor-cars,  to  part  with  it 
altogether.  Presently  the  police  stepped  in  and  finding 
his  yard  inadequately  guarded  annexed  that  too. 
Poor  Jones  was  now  detected  in  a  new  offence  ;  having 
no  yard  for  exercise  (as  by  statute  he  was  bound  to  do) 
his  health  was  sadly  undermined  :  and  the  medical 
officer  declaring  that  his  legs  were  "  atrophied  from 
long  disuse,"  must  needs  amputate  them  both.  Others, 
with  still  more  thorough-going  and  officious  zeal,  took 
off  his  arms,  and  soon  (out  of  sheer  pity  for  such  help- 
lessness) his  head.  The  rights  of  dog  and  motorist  has 
each  in  turn  been  vindicated  ;  the  cause  of  public 
security  and  public  health  had  triumphed  ;  the  passion 
for  reform  was  satisfied  ;  and  Jones  was  left  an 
obtruncated  corpse.  The  moral  of  this  grotesque 
allegory  is  plain.  State  interference  may  secure  us 
immunity  from  wrong,  but  it  also  deprives  us  of  the 
opportunity  for  right.  To  cut  off  the  offending  hand 
or  foot,  is  to  go  maimed  through  life  ;  and  in  the 
anatomy  of  human  character  liberties  are  the  means  of 
self-expression  as  the  members  are  the  agents  of  the 
brain.  So  with  every  fresh  restriction  of  our  liberties, 
it  is  as  though  a  limb  were  lost.     And  the  real  danger 


212  NEW  FALLACIES  OF  MIDAS 

of  Socialistic  *  legislation  is  precisely  this,  that,  when  the 
State,  repressing  here,  curtailing  there,  shall  have 
shaped  the  individual  to  the  point  of  true  perfection, 
his  virtues  will  have  vanished  with  his  vices,  and  he 
will  be  found  a  thing,  like  Jones,  without  human 
character  or  human  powers. 

Yet,  just  because  human  nature  is  vicious  and  unruly^ 
and  because  without  discipline  there  can  be  no  civilised 
existence,  it  follows  that  the  State  must  interfere  with 
the  relations  of  its  subjects.  Such  interference  however 
may  take  two  forms  ;  it  may  seek  to  limit  liberties  or 
it  may  seek  to  destroy  them.  When,  for  example,  the 
use  of  alcohol  tempts  men  to  drunkenness,  the  State 
may  either  restrict  its  use  by  visiting  heavy  penalties 
upon  excess,  or  alternatively  it  may  prohibit  brewing 
and  remove  the  temptation  altogether.  The  Pro- 
hibitionist will  favour  the  one  course,  because  he  is 
persuaded  that  the  use  of  alcohol  is  wholly  bad  ;  his 
opponent  will  favour  the  other  because  he  holds  that 
alcohol  is  in  itself  a  good,  and  bad  only  in  its  misuse  ; 
and  upon  the  right  choice  between  these  opposing 
views  the  wisdom  of  reform  will  depend.  So  when 
human  nature  goes  astray  and  needs  the  correction  of 
external  discipline,  this  question  must  precede  all 
legislative  interference.  Have  We  here  to  deal  with 
something  wholly  wrong — a  canker  on  human  nature 
which  we  must  root  out  at  whatever  cost  ?  or  with 
something  for  which,  if  rightly  used,  human  nature  is 
the  better  and  the  richer,  and  which  therefore  we  must^ 
if  possible,  retain  ?  Now  there  are  some  abuses  which 
fall  beyond  any  doubt  under  the  first  of  these  two 
heads.  If  the  State  sets  an  absolute  veto  upon  duelling^ 
or  upon  the  sale  of  harmful  drugs,  there  will  be  no 
apologists  to  uphold  the  right  to  kill,  or  to  maintain 

*  Socialistic,  whether  of  the  Collect ivist  type  or  of  the  Syndicalist 
type  known  as  Guild-Socialism  :  for  in  the  latter ,  as  we  have  seen.  State- 
ownership,   and  in   some  degree  State-Control,  are   equally  essential. 


THE  RIGHTS  OF  THE  INDIVIDUAL      213 

that  absinthe  drunk  in  moderation  is  good  for  health. 
On  the  other  hand,  we  are  no  less  agreed  that  certain 
liberties  are  fundamentally  good ;  and  these,  even 
while  we  are  compelled  to  limit,  we  shall  endeavour  to 
preserve.  Such,  for  example,  is  the  power  of  a  parent 
over  his  child.  We  believe  the  institution  of  the  family 
to  be  the  central  tie  of  human  life  and  the  source  of 
half  our  human  virtues.  Therefore  we  shall  tamper 
with  its  rights  as  little  as  may  be.  It  may  be  that  the 
abuse  of  parental  liberties  will  compel  us  to  curtail 
them  ;  we  may  forbid  the  father  to  chastise  his  son  in 
a  brutal  or  even  in  an  unreasonable  manner  ;  we  may 
force  him  (often  under  circumstances  of  extreme 
hardship)  to  send  his  son  to  school.  But  the  respon- 
sibility of  a  parent  towards  his  child  will  still  stand; 
and  that  this  responsibility,  however  liable  to  neglect  or 
to  misuse,  should  be  altogether  done  away,  is  for  most 
of  us  unthinkable.  It  is  a  permanent  and  inalienable 
right,  which  every  interference  has  not  weakened ; 
on  the  contrary,  the  limitations  which  we  have 
imposed  upon  that  right,  have  given  it  a  new  and  richer 
value.  The  relations  between  parent  and  child  are, 
in  fact,  more  sincere,  more  generous  and  more  deep 
to-day  than  in  the  old  era  of  parental  tyranny.  For 
limitation  has  not  supplanted  the  privilege  of  family 
life  nor  destroyed  the  liberty  of  love  :  and  just  as  the 
artist  who  submits  to  the  constraints  and  conventions 
of  his  craft,  gains  a  beauty  and  a  strength  which 
unrestricted  licence  cannot  give,  so  under  the  discipline 
of  law,  when  rightly  framed,  we  may  fmd  a  stronger  and 
truer  freedom  than  we  yet  have  known. 

(ii.) 

Remembering,  then,  that  it  is  easier  to  mar  insti- 
tutions than  to  make  them,  let  us  beware  lest  under 
the  present   strong  impulse  of  reform   we   should  be 


214  NEW  FALLACIES  OF  MIDAS 

tempted  to  destroy  where  we  cannot  build,  and  sweep 
awa}^  what  we  are  powerless  to  replace.     Standing  as 
we  do  upon  the  brink  of  far-reaching  economic  changes, 
we  shall  do  well  to  take  account  not  of  the  present  only, 
but  of  the  future  and  the  past  ;  and  when  rival  theorists 
summon  us  in  the    name  of    freedom    to   reform    this 
institution  and  to  make  an  end  of  that,  it  behoves  us  to 
look  closely  into  human  nature,  and  to  enquire  what 
are  the  economic  liberties  which  are  fundamental  in 
man  and  robbed  of  which  he  could  no  longer  be  called 
free.     Such  liberties,  as  I  think,  are  two  in  number  ; 
and  of  these    the    first    is    the  liberty    of    bargaining. 
The  power  to  accept  an  exchange  or  refuse  it,    the 
power  to  offer  or  withhold  at  Mali  his  property,  his 
money  and  his  labour,  is  the  inalienable  right  of   the 
free  man.     Often,   it  is  true,   the  State  for  its  own 
reasons  may  encroach  upon  that  right.     It  may  enforce 
the  sale  of  certain  goods  at  a  fixed  price  ;    or  it  may 
decree  the  payment  of  a  certain  wage  in  a  particular 
industry.     Yet     these     infringements     of     individual 
liberties  are  the  exception  rather  than  the  rule  ;    and 
even  in  such  cases  the  State  does  no  more  than  regulate 
the  conditions  under  which  bargains  shall  be  made  ; 
the  bargain  itself  is  not  compulsory.     The  employer 
need  not  pay  the  statutory  wage  if  he  prefers  to  let  his 
mills  stand  idle  ;   and  the  grocer  who  objects  to  selling 
sugar  at  the  Food  Controller's  price,  is  at  least  free  to 
give  up  his  business.     But  suppose  the  State  were  to 
address   its   subjects    thus  ;     "  I    no   longer   say  that 
if  you  choo'^e  to  perform  such  and  such  services  for  other 
men,  you  shall  perform  under  such  and  such  conditions  ; 
but  I  say  that  these  services  have  got  to  be  performed  ; 
and  perform  them  you  shall    (and  at  such  conditions 
as  I  please),  whether  you  choose  or  not  "  ;    then  indeed 
the  individual  would  cease  to  be  a  free  agent  altogether 
and  the  last  semblance  of  economic  liberty  Mould  have 
been  lost.     Such  loss  of  liberty  is,  in  fact,  what  Labour 


THE  RIGHTS  OF  THE  INDIVIDUAL      215 

dreads  as  it  dreads  nothing  else  ;  the  very  fear  of  it  has 
made  industrial  conscription  for  the  purpose  of  war 
impossible;  it  ^^  recked  the  scheme  of  National  Service 
from  the  start  ;  and  it  has  made  the  working  classes 
bitterly  distrustful  of  every  form  of  State-Control. 
Yet  such  loss  of  liberty  is  none  the  less  the  very  goal 
to  which  Labour's  own  policies  must  inevitably  lead. 
Under  Socialism  and  Guila  Socialism  alike,  the  State's 
claim  to  fix  the  \\age  of  the  producer  must  sooner  or 
later  clash  with  the  producer's  liberty  to  viithhold  his 
labour,  whenever  the  wages  do  not  please  him  ;  and 
when  this  clash  occurs  the  State  will  have  no  choice  but 
to  emplo}''  compulsion  or  (if  it  prefers)  to  abdicate  its 
claim.  The  power  of  the  strike  will  either  remain 
effective,  or  else  it  will  be  suppressed  by  the  authority 
of  law  ;  ana  in  the  latter  event  the  producer  will  have 
lost  his  economic  freedom.  Nor,  in  the  long  run,  can 
the  State  hope  to  banish  competition  except  with  the 
same  result.  There  is  only  one  means  of  making  wages 
independent  of  the  law  of  supply  and  demand  ;  and 
that  is  by  depriving  the  individual  of  the  liberty  to 
choose  his  trade.  Let  us  suppose  for  instance  that  the 
State  assumes  control  over  sea- transport.  The  carrying 
trade  is  an  absolute  necessity  of  national  existence  ; 
the  need  of  export  and  import  is  permanent  and 
urgent  ;  and  the  remuneration  therefore  is  less  affected 
than  in  more  speculative  trades,  by  the  fluctuations  of 
the  market.  The  State  then  may  reasonably  assess 
the  value  of  this  service  to  the  community  and  establish 
with  justice  a  permanent  standard  of  remuneration. 
As  times  goes  on  however,  it  may  well  happen  that 
men  will  be  less  and  less  attracted  towards  the 
mercantile  marine.  In  comparison  with  the  security 
and  comfort  of  rival  occupations,  the  dangers  and 
hardships  of  a  life  at  sea  will  appear  to  them  distasteful. 
The  flow  of  recruits  will  cease  ;  and  the  State  will 
once  more  be  faced  with  this  ailemma  ;    either  it  must 

16 


2i6  NEW  FALLACIES  OF  MIDAS 

tempt  them  with  a  higher  wage  and  so  admit  the 
individual's  Hberty  of  bargaining  or  once  again  it  must 
fall  back  upon  compulsion  and  revive  the  press-gang 
in  a  novel  form.  There  is  no  third  alternative.  Either 
the  individual  is  free  or  he  is  not  free  ;  and  no  system 
ever  inventea  can  make  the  State  his  economic  master 
and  yet  leave  him  other  than  an  economic  slave. 

The  second  liberty  of  the  individual,  is  the  liberty  to 
save.  Not  even  the  State  can  compel  a  man  to  con- 
sume against  his  will  ;  and  it  is  clear  that,  if  he  con- 
sumes less  than  he  produces  he  will  have  a  surplus  in 
reserve.  Unless  this  is  forcibly  taken  from  him,  he 
may  use  it  either  for  investment  (that  is,  he  may  entrust 
it  as  a  loan  to  someone  else  in  return  for  certain  pay- 
ments) or  while  living  upon  the  surplus,  he  may  turn 
his  hand  to  producing  something  else  and  enlarge 
his  profits  in  that  way.  In  either  case,  he  will  possess 
Capital  and  reap  the  advantage  of  Capital's  reward. 
Now,  under  Socialism  and  Syndicalism,  as  we  have 
seen,  it  is  proposed  that  all  Capital  should  be  taken  out 
of  the  hands  of  the  individual,  and  be  vested  in  the 
Unions  or  the  State.  In  other  words,  individual 
saving  will  be  replaced  by  collective  saving  ;  and,  just 
as  the  directors  of  a  company  put  by  a  portion  of  their 
annual  profits  for  the  future  aevelopment  of  the 
business,  so  by  the  State's  or  Guild's  economy  fresh 
additiims  would  be  made  to  the  collective  capital,  in 
which  addition  the  several  members  would  each  possess 
some  stake.  Such  a  scheme  is  practicable  enough  ; 
and  here  at  any  rate  we  need  not  question  its  power 
to  develop  industry  wisely  and  to  secure  a  progressive 
increase  of  production.  But  in  any  case  it  could 
hardly  preclude  the  individual's  right  of  saving 
privately  on  his  own  account.  The  thrifty  man, 
earning  a  good  salary  or  wage,  would  still  be  able  to 
put  by  a  handsome  surplus  for  investment ;  and 
indeed  for  the  father  of  a  growing  family  such  provision 


THE  RIGHTS  OF  THE  INDIVIDUAL      217 

for  the  future  would  be  a  necessity  rather  than  a  right- 
Even  if  the  privileges  of  private  capital  [were  enor- 
mously curtailed,  they  could  not  be  altogether 
destroyed,  except  by  the  sacrifice  of  the  individual's 
freedom ;  and,  seeing  how  great  is  the  power  of 
capital,  how  swift  to  accumulate  and  to  gather 
strength  at  every  stride,  we  may  be  sure  that  nothing 
short  of  the  most  arbitrary  restrictions  could  hold  the 
capitalist  in  check.  Somewhere  there  would  be  found 
a  fresh  outlet  for  his  enterprise,  and  therein  fresh 
means  to  profit  by  his  resources.  So  long  as  man  is 
free  to  save  and  free  to  bargain  (as  every  man  of 
character  would  wish  to  be)  Socalism  and  even  Syndi- 
calism must  both  prove  broken  reeds  in  the  reformer's 
hand  ;  for  in  each  case  the  time  will  surely  come  when 
he  must  either  surrender  his  doctrine  of  the  State's 
supremacy  or  else  his  faith  in  the  liberty  of  man. 

The  truth  is  that  the  Collectivist's  ideal  cannot  be 
logically  consistent  without  denying  the  premises  on 
which  democracy  depends  ;  for  like  the  Individualist's 
ideal  it  is  based  upon  a  fallacy.  To  the  men  of  the 
Manchester  School  the  econorpic  unit  was  the  indi- 
vidual man,  his  duties  wholly  self-regarding,  his 
interests  everywhere  opposed  to  the  interests  cf  others, 
"  and  his  creed  to  leave  the  public  good  to  take  care  of 
itself  and  to  tolerate  no  interference  from  the  State. 
To  the  Collectivist  on  the  other  hand,  the  economic 
unit  is  the  general  will  as  embodied  in  the  State  ;  and 
(if  his  theories  are  pressed  to  their  conclusion)  his  State 
would  take  no  more  account  of  the  individual  than  the 
Individualist  would  take  account  of  the  State.  The 
community  would  be  everything  ;  the  single  citizen 
no  better  than  the  slave  of  its  will  ;  and  wherever  public 
and  private  interests  clash,  the  latter  would  go  to  the 
wall.  Now  this  view  of  the  Collectivist  is,  like  the 
other,  founded  upon  an  unreal  abstraction.  The 
individual,  independent  of  his  fellows,  and  unaffected 


?i8  NEW  FALLACIES  OF  MIDAS 

by  their  needs,  is  a  pure  fiction  ;  the  State  which  uses 
its  citizens  as  mere  pawns,  is  equally  an  inhuman 
monster.  The  true  economic  unit  is  neither  the 
individual  nor  the  State,  but  the  harmony  between 
them  both.  And  there  is  but  one  way  and  one  way 
only  (as  our  political  development  has  long  since  taught 
us)  whereby  true  and  lasting  harmony  can  be  attained. 
It  is  not  through  some  cut  and  dried  system  of  arbi- 
trary control,  which  ignores  the  individual's  liberties 
and  moulds  him  to  a  mechanical  obedience  ;  it  is  rather 
through  the  education  of  an  elastic  discipline,  which, 
while  it  punishes  the  abuse  of  liberties,  yet  seeks  to 
inculcate  their  proper  use,  and  which  instead  of  com- 
pelling the  slavish  acceptance  of  a  dull  conformity, 
would  awaken  the  quickening  spirit  of  spontaneous 
service.  For  while  the  harmony  which  depends  upon 
compulsion  is  like  the  harmony  of  the  beehive  or  the 
ant-heap,  efficient  perhaps,  but  static  and  unpro- 
gressive  ;  the  harmony  of  free  service  is  living  and 
creative.  Nothing  but  the  individual  will  can  be  the 
ultimate  source  of  all  vitality  ;  even  in  the  animal 
world  it  is  the  rare  divergence  from  the  normal  type 
that  creates  a  new  species ;  and  among  men  the 
strongest  and  wisest  lead  the  way.  So  it  is  upon  the 
free  development  of  individuals  that  the  vitality  and 
progress  ot  the  State  must  in  the  last  resort  depend. 
Though  the  whole  is  greater  than  the  parts,  yet  if  the 
parts  be  rotten,  the  whole  also  will  surely  die. 

(iii.) 

Every  sane  man  values  liberty  in  himself ;  he 
deprecates  it  only  in  others.  To  save  and  withal  to 
profit  by  his  saving,  is  his  desire,  if  not  his  practice  ; 
and  even  the  poorest  workman  would  doubtless  turn 
capitalist — if  he  could.  But  of  this  he  sees  no  present 
and  indeed  no  future  prospect.  Others,  whether  by 
luck  or  skill,  have  drawn  the  big  prizes  in  the  lottery 


f 


THE  RIGHTS  OF  THE  INDIVIDUAL      219 

of  life  ;  and  he,  like  the  disappointed  gambler,  rebels 
against  his  fate  and  questions  even  the  justice  of  the 
rules  .  So  it  is  not  strange  that  he  should  lend  a  ready 
ear  to  the  facile  remedies  of  theorists,  telling  him  that 
all  the  profits  should  be  pooled,  the  cards  re-dealt,  and 
the  game  played  out  afresh  on  the  lines  of  a  more 
equitable  partition.  Liberty  is  all  very  fine  in  theory  ; 
but  it  has  not  supplied  him  with  food  to  eat  and  clothes 
to  wear.  And  though  the  new  system  may  lack  the 
spice  of  adventure  of  the  old,  at  least  it  will  pay  him 
better.  If  indeed,  Socialism  means  higher  wages, 
greater  comfort  and  less  work,  its  moral  disadvantages 
may  (so  the  poor  man  thinks)  be  easily  discounted. 

Upon  one  point  of  plain  arithmetic  the  ideas  of  the 
Socialist,  the  Christian  and  the  thief  meet  in  a  strange 
conjunction.  All  three  are  agreed  that  to  make  the 
poor  man  richer  we  must  make  the  rich  man  poorer  ; 
and  although  they  are  not  at  one  about  the  means  of 
doing  it,  that  is  no  reason  to  dispute  the  accuracy 
of  their  calculation.  No  special  pleading  of  the 
Socialist  s  opponents  will  alter  the  obvious  fact  that 
the  poor  would  ben>  fit  handsomely  by  a  redistribution 
of  the  national  wealth.  Before  the  war,  at  any  rate, 
the  average  income  of  the  working  man  lay  somewhere 
between  £60  and  ^70  a  year,  and,  if  by  some  miracle, 
the  national  income  should  be  divided  up  and  dis- 
tributed in  equal  parts  among  all  adult  bread- 
winners, then  that  average  would  be  increased  by 
approximately  one  half.  So  sweeping  a  reform  however 
is  hardly  to  be  contemplated  by  even  the  wildest  of 
fanatics.  The  object  of  the  Socialist's  attack  is  not 
so  much  the  man  of  moderate  means,  the  small 
capitalist,  the  professional  man,  the  tenant-farmer 
or  the  well  paid  artisan  ;  it  is  directed  rather  against 
the  super-wealthy,  the  individuals  who  possess  an 
income  of  (let  us  say)  £5,000  or  over.  If  their  goods 
could  be  "  divided  and  given  to  the  poor,"  he  would 


220  NEW  FAILACIES  OF  MIDAS 

feel  that  justice  had  been  done  In  point  of  fact,  the 
net  result  of  such  a  deal  would  be  to  raise  the  average 
by  some  ten  pounds  a  head — an  increase  of  one  sixth, 
a  welcome  windfall  it  may  be,  but  hardly  a  signal 
triumph  for  the  Socialist  cause.  To  take  an  alter- 
native suggestion,  let  us  suppose  the  transference  of 
wealth  to  follow  the  line  of  the  Syndicalist  programme  ; 
in  that  case  the  results  would  be  a  trifle  better  for  the 
workers.  Of  the  gross  profits  of  industrial  out-put  it 
has  been  reckoned  that  the  capitalist's  share  is 
seventeen  per  cent.,  the  workers  sixty-six,  the  balance 
going  to  the  salaried  staff  or  to  upkeep  and  repairs. 
If,  therefore,  the  capitalist's  share  were  handed  over 
to  the  workers,  it  would  mean  the  addition  of  not  one 
sixth,  but  one  quarter  to  their  income.  This,  too,  is 
an  addition  not  to  be  despised  ;  and  in  these  figures 
there  is  enough  perhaps  to  prove  that  such  radical 
reform  is  indeed  one  way  to  make  the  poor  man  richer. 
That  it  is  the  only  way,  however,  is  patently  untrue  ; 
that  it  is  even  the  best  or  quickest  way  is  very  doubtful. 
For  it  is  equally  possible  that  capitalist  and  workman 
should  both  grow  rich  together.  Such  has  in  fact 
been  the  experience  of  the  past.  During  the  nineteenth 
century,  the  wealth  of  the  nation  grew  prodigiously, 
and  no  doubt  large  fortunes  were  made  by  individuals  ; 
but  it  is  beyond  question  that  a  very  large  share  of  that 
increase  went  to  the  workers.  Whereas  the  average 
of  rich  men's  incomes  (incomes,  that  is,  of  £5,000  a  year 
and  over)  was  augmented  by  roughly  one  third,* 
the  income  of  the  adult  worker  was  more  than  doubled 
between  1801  and  1910  ;  and  though  for  such  progress 
no  special  thanks  are  due  to  the  individual  master  who 
was  seldom  a  willing  party  to  this  rise  of  wages,  never- 
theless   some   credit   must  be  given  to  the  capitalist 

*  It  must  however  in  fairness  be  observed  that,  the  number  of 
"  rich  "  men  has  increased  roughly  tenfold,  whereas  the  working 
population  has  only  been  quadrupled. 


THE  RIGHTS  OF  THE  INDIVIDUAL      221 

system  as  a  whole  ;  for  without  that  system  such 
progress  would  scarcely  have  been  possible  at  all.  It 
was  the  enterprise,  the  courage,  the  foresight  and  (if  you 
will)  the  greed  of  the  big  manufacturers  and  merchants 
that  gave  the  needful  impetus  to  trade,  initiated 
hazardous  experiments,  perfected  new  devices,  and 
so  brought  about  that  miraculous  increase  of  produc- 
tion of  which  the  workers  are  reaping  the  benefit  to-day. 
Did  we  stand  once  more  on  the  threshold  of  the  Indus- 
trial Revolution,  and  see  clearly  before  us  all  the  gain  and 
loss  of  unrestricted  competition,  wh»-  would  dare  assert 
that  any  alternative  system  could  produce  equally  good 
results  ?  And,  looking  forward  into  the  future,  what 
assurance  can  we  have  that,  if  our  poKcy  were  to 
be  reversed  to-morrow,  the  same  rate  of  progress  would 
continue  as  in  the  past  ?  The  wise  traveller,  when  he 
sights  a  pool  of  water  across  the  desert  sands,  does  not 
empty  his  flask  dry  until  he  has  good  proof  that  his 
hopes  are  based  on  no  illusion  ;  and  before  we  can 
safely  dispense  with  capitalist  control,  we  too,  must 
have  definite  proof  of  the  efficiency  of  its  successor. 
We  must  be  sure  that  the  collective  intelligence  and 
purpose  of  the  masses,  will  be  equal  to  their  task.  Will 
they,  in  other  words,  be  able  to  repeat  or  even  to 
improve  upon  the  capitalist  achievement  ?  Is  there 
real  reason  to  predict  that  a  hundred  years  hence  the 
average  member  of  the  Socialist  community  would  be 
twice  as  rich  or  more  than  twice  as  rich  as  the 
average  worker  of  to-day  ? 

Before  we  can  give  an  answer  to  these  questions  and 
decide  whether  industry  under  popular  control  would 
be  as  effective  as  under  capitalist  control,  we  must, 
I  think,  consider  the  problem  under  three  aspects,  ; 
first,  what  will  be  the  effect  of  this  change  on  the  pro- 
duction of  wealth,  second  upon  the  saving  of  wealth, 
■  (that  is  on  capital,)  and  last,  upon  the  use  of  wealth  when 
it  is  saved. 


222  NEW  FALLACIES  OF  MIDAS 

(i)  It  is  commonly  asserted  that  with  the  disappear- 
ance of  free  competition,  the  chief  incentive  to  energy 
would  have  been  lost  ;  and  that  is  tantamount  to 
saying  that  men  are  incapable  of  giving  their  best  work 
except  for  the  purely  sellish  ends  of  private  profit. 
Now  it  is  doubtless  true  that  much  of  the  enterprise  by 
which  trade  and  manufacture  have  been  developed, 
has  been  due  to  the  money-making  instincts  of 
private  individuals.  The  pioneers  of  the  last  century 
were  men  who  both  owned  and  controlled  their 
businesses  and  who  therefore  profited  directly  by  the 
success  of  their  own  management.  But  since  then 
circumstances  have  somewhat  changed  ;  it  is  more 
common  nowadays  to  find  businesses  controlled  by 
salaried  managers  who  have  only  an  indirect  interest 
in  the  profits  of  the  concern  ;  nor  is  there  any  good 
reason  to  suppose  that  their  work  is  less  efficient  than 
the  Work  of  the  owner  managers  or  that  their  policy 
is  less  progressive.  In  any  case,  three  quarters  of  the 
population  Work  upon  fixed  salaries  or  wages,  nor  have 
they  ever  worked  on  any  other  terms  ;  and  it  is  rating 
human  nature  unnecessarily  low  to  suppose  that  the 
men  at  the  top  have  a  different  conception  of  their 
duties  from  the  men  at  the  bottom.  Nor,  after  all, 
will  all  stimulus  to  energy  and  zeal  be  removed  by 
Socialism.  In  the  first  place  services  will  be  still 
rewarded  in  proportion  to  their  worth  ;  and  there  will 
still  be  a  hierarchy  of  functions  and  good  work  will 
still  earn  the  reward  of  merited  promotion.  Secondly, 
we  must  not  forget  that  good  work  will  always  directly 
or  indirectly  mean  the  worker's  gain,  even  though  that 
gain  be  shared  by  others.  We  have  abundant  proof 
already  that  a  workman  will  work  better,  when  he 
knows  that  the  whole  shop  will  profit  by  his  industry, 
and  himself  along  with  other  members  of  the  shop. 
And,  in  this  respect,  Syndicalism  possesses  one  manifest 
advantage  over  the  Socialistic  system.     Where  each 


THE  RIGHTS  OF  THE  INDIVIDUAL      223 

individual  is  the  servant  of  the  State,  we  may  hope 
indeed  that  he  will  feel  the  call  of  patriotic  duty  and 
put  forth  his  best  efforts  to  benefit  the  community  at 
large.  But  human  imagination  is  not  strong.  So 
large  a  unit  as  the  State  is  too  vague  and  too  elusive 
to  appeal  to  every  man.  He  will  never  see  perhaps  the 
tangible  results  of  his  endeavours  ;  his  share  in  the 
general  scheme  is  too  minute  to  excite  his  ambition  or 
his  pride.  But  make  the  economic  unit  smaller  ; 
share  out  the  profits  among  the  members  of  a  Guild  or 
still  better  of  a  workshop  ;  and  the  case  will  be  very 
different.  Then  at  once  a  certain  esprit  de  corps  will 
be  aroused  ;  the  healthy  influence  of  public  opinion 
will  supply  a  stimulus  which  will  be  felt  by  managers 
and  men  alike  ;  and  even  the  loss  of  competition  will 
not  be  noticed,  if  the  spirit  of  co-operation  takes  its 
place.  In  short,  so  far  as  efficiency  and  effort  are 
concerned,  industry  might  well  pass  from  indi- 
vidualist to  syndicate  control,  and  still  siirvive  the 
shock. 

(^)  Over  the  second  point,  however,  we  are  at  once 
upon  more  questionable  ground.  It  is  clear  that  the 
vigorous  production  of  wealth  is  not  alone  sufficient  for 
progress  ;  there  must  also  be  conservation  of  wealth, 
or  industry  will  remain  at  a  standstill.  Now  though 
men  may  be  ready  to  work  their  best  for  the  common 
cause,  it  is  much  more  doubtful  whether  they  will 
be  prepared  to  save  for  it.  Economy  of  public  funds 
has  never  been  an  easy  or  common  virtue.  From 
the  minister  who  squanders  the  resources  of  the  State, 
down  to  the  man  who  wastes  the  writing-paper  at  his 
club,  it  is  the  same  unvarying  tale.  What  is  every- 
body's business  is  the  business  of  no  one  in  particular  ; 
and  while  we  are  careful  of  the  private  penny,  we  are 
carelessly  indifferent  of  the  public  pound  ;  and  if  proof 
of  this  Were  needed,  the  record  of  municipal  finance  is 
enough    to   show  how  little  the   average    citizen    is 


224  NEW  FALLACIES  OF  MIDAS 

interested  in  collective   economy.     To  make    matters 
worse,  thrift  is  not  the  natural  instinct  of  our  people  ; 
they  are  far  from  being  a  saving  nation  like  the  French  ; 
and  we  cannot  expect  them  suddenly  to  develop  in  the 
management  of  public  funds,  a  virtue  which  they  do 
not  practise  in  their  homes.     It  is  true  of  course  that 
they  have  little  opportunity  of  thrift ;    but  when  the 
opportunity  does  occur  (as  it  occurred  to  many  during 
the  war)  it  is  not  used.     Still  less  is  that  greatest  of 
economies,    wise    expenditure,    properly    understood. 
The  reason  why  so  many  shoddy  tenements  are  built 
at    the    present  day,   is  partly  at  least  because  the 
working  man  prefers  the  advantages  of  cheapness  to 
the   superior   comforts   of  -a   well-constructed   home  ; 
and  if,  after  the  war,  our  suburbs  are  filled  with  rows 
and  rows  of  ugly  unsubstantial  houses,  it  will  not  be 
because  the  Board  of  Trade  is  lacking  in  ideals,  but 
because  Labour  sets  so  little  value  upon  either   per- 
manence or  beauty  that  it    will    grudge    to   add   one 
unnecessary  sixpence  to  the  rent.     Again,  the  wisest 
investment  that  a  man  can  ever  make  is  the  sound 
education  of  his  children,  yet  if  the  law  permitted  it,  how 
many  parents  would  gladly  cut  the  years   of  schooling 
short  for  the  sake  of  some  trifling  addition  to    the 
family's  weekly  income.     In  short,  it  is  not  at  all  easy 
to    believe     that    there    exists    among    the    majority 
of    men    sufficient    self-restraint    or    commonsense    to 
ensure    a    progressive     increase     of     our     industrial 
resources,   should   the   control   of  industry  ever   pass 
into  their  hands.     When  the  annual  budget  was  sub- 
mitted to  their  decision,  high  wages  would  be  more 
popular    than    wise    retrenchment  ;     the    promise    of 
speedy  returns  would  catch  more  votes  than  the  slower 
programme    of    improved     production,     and    in     the 
financial    schemes    of    a    democracy    there    would    be 
little   of   the  deliberate  patience   and  farsighted  cal- 
culations   of    the    independent    capitalist.     It    seems 


THE  RIGHTS  OF  THE  INDIVIDUAL      225 

moreover  that  from  the  very  circumstances  of  the 
case  their  temptations  to  extravagant  expenditure 
will  in  a  sense  be  greater  than  are  his.  The  private 
individual  who  receives  an  income  of  a  hundred 
thousand  pounds,  can  hardly  spend  the  whole.  It  is 
almost  a  foregone  conclusion  that  three  quarters  of  it 
will  at  the  very  least  be  saved,  and  so  will  serve  in  its 
turn  to  capitalise  fresh  output,  by  which  we  must 
remember  others  will  benefit  as  well  as  he.  So  the 
great  financier  acts,  as  it  were,  as  the  repository  of  the 
nation's  wealth,  or  at  least  as  a  brake  upon  the  national 
expenditure.  If;  on  the  other  hand,  that  hundred 
thousand  pounds  were  distributed  among  a  hundred 
thousand  persons,  the  result  would  probably  be  very 
different ;  for  the  temptation  of  spending  it  would  be 
increased  a  hundred  thousand  fold.  Wealth  may  be 
likened  to  water  which,  if  gathered  in  a  lake  or  hollow 
can  be  saved  for  further  uses,  but  which,  if  it  descends 
upon  the  ground  in  innumerable  rain  drops,  is  rapidly 
absorbed  and  drained  away.  It  may  indeed  be  argued 
that  as  rain  is  necessary  to  feed  the  ground  and  fertilise 
the  crops,  so  in  the  same  manner,  increased  con- 
sumption may  raise  the  standard  of  living,  stimulate 
the  people's  energies,  give  an  impetus  to  trade,  and 
thus  in  the  end  bear  fruit  in  an  increased  production. 
But  the  central  reservoir  is  also  needed,  that  is  if  we 
are  to  improve  on  nature  and  irrigate  our  lands.  So 
the  capitalist  too  may  have  his  function  ;  he  too  may 
be  necessary  to  the  proper  improvement  and  develop- 
ment of  our  national  resources.  And  if  we  were  once 
to  break  the  dam  which  holds  these  gathered  Waters, 
can  we  be  sure  of  the  result  ?  No  doubt  a  temporary 
relief  would  be  felt  in  the  parched  and  sterile  places  ; 
maybe  the  immediate  harvest  would  be  the  richest  ever 
known.  But  who  can  say  whether  in  the  uncertain 
future,  the  scattered  waters  could  ever  be  regathered 
or   the   broken   dam   rebuilt  ?      It   seems   more   than 


226  NEW  FALLACIES  OF  MIDAS 

doubtful  whether  now  or  for  many  years  to  come 
democracy  could  be  trusted  to  regulate  its  own  con- 
sumption wisely  or  build  up  its  own  capital  with  a  sure 
and  steady  growth  ;  and  without  a  steady  growth  of 
capital  there  can  most  certainly  be  no  permanent 
advance  towards  the  goal  of  material  happiness. 

(3)   There   is   a   third   factor   which   must   play   an 
important  part  in  industrial  progress  ;     I   mean    the 
use  and  investment  of  capital,  and  how  this  would  fare 
under  a  system  of  popular  control  falls  next  to  be 
considered.     Now  there  are  many  qualities  which  go 
to  make  the  good  financier;    not  the  least  perhaps  is 
courage.     He  must  be  ready  to  sink  his  money  in  some 
new  scheme  of  which  he  cannot  foresee  the  certain  issue 
except  with  the  eye  of  faith  ;   he  must  be  ready  to  take 
risks  ;  and  something  of  the  eager  instinct  for  adventure 
is  needed  in  his  composition.     However  when  we  come 
to  ask  how  far  we  might  count  upon  the  same  qualities 
of  enterprise  and  courage  in  the  policy  of  the  Socialistic 
state   or   Syndicalist    society,  it  may    seem   at    first 
sight  as  though  they  will  not  be  needed.     By  the  very 
act  of  pooling  our  resources,  we  should  to  some  extent 
eliminate    the    element    of    risk.     The    losses    of    an 
unsuccessful  venture  would  be  so  widely  spread  that 
they  would  scarcely  be  felt  by  the  individual  member 
of  the  community  ;    and  it  may  be  thought  that  the 
State  could  embark  light-heartedly  upon  schemes  from 
which  the  most  daring  capitalist  would  shrink.     Yet 
after  all,   can  we  be  certain  that  it  would  ?     Grown 
citizens  do  not  gamble  for  ha'pence.     It  is  only  the 
investor  who  is  out  to  get  exceptional  returns,  that  is 
willing    to    take    exceptional    risks.     And    we    must 
remember    that    under    the     collectivist    system    this 
particular  incentive  will  be  gone  ;  there  could  be  no 
more  playing  for  high  stakes.     For,  if  the  individual's 
share  of  risk  is  diminished,  it  is  clear  that  his  share  of 
profit  will  be  diminished  also  ;   and  a  speculation  which 


THE  RIGHTS  OF  THE  INDIVIDUAL      227 

appeals  to  the  adventurous  when  it  offers  the  prospect 
of  a  twenty  per  cent,  return,  must  seem  less  tempting 
when  it  means  no  more  than  the  difference  between  four 
per  cent,  and  five.  The  instinct  for  adventure  would 
hardly  be  encouraged  by  the  Socialistic  state ;  least  of 
all  is  it  likely  to  be  found  in  the  salaried  officials  who 
will  for  the  most  part  direct  financial  policies.  For  as 
we  have  seen  above,  the  offtcial  is  not  like  the  capitalist 
his  own  master.  He  has  none  of  the  capitalist's 
inducement  to  adventure.  He  will  not  make  any 
personal  profit  out  of  a  speculative  deal,  and  he  dreads 
the  odium  of  possible  failure  more  than  he  values  the 
applause  of  possible  success.  Neither  is  he  likely  to 
initiate  nor  is  the  jealous  body  that  controls  him  likely 
to  approve  any  sudden  or  bold  departures  from  the 
beaten  track.  Democracies  are  naturally  suspicious 
of  their  servants,  quick  to  visit  punishment  upon  those 
who  blunder,  slow  to  encourage  originality  and 
imagination  ;  and  if  the  industrial  pioneer  is  to  have 
free  rein  for  his  genius  he  must  be  hampered  neither 
by  the  red  tape  of  officialdom  nor  by  the  burden  of 
responsibility  to  others.  This  is  not  indeed  to  say  that 
the  spirit  of  adventure  will  be  equally  needed  in  every 
branch  of  industry  or  in  every  department  of  com- 
merce. There  are  some  kinds  of  production  which 
involve  little  element  of  risk.  When  the  demand  for 
a  thing  is  constant,  and  the  supply  of  it  regular  and 
secure,  the  producer's  task  is  straight-forward  enough  ; 
there  is  little  call  for  startling  innovations.  The 
transport  service  is  a  case  in  point.  We  can  calculate 
precisely  what  train-service  will  be  needed  in  the 
various  parts  of  the  country  ;  and  no  special  enterprise 
is  wanted  to  supply  those  needs.  Competition  in 
supplying  them  will  in  the  long  run  be  extravagant  and 
costly  ;  and  a  public  system  of  control  (if  placed  in 
reasonably  skilful  and  energetic  hands)  would  mean 
better  organisation  and  substantial  economics.     There 


228  NEW  FALLACIES  OF  MIDAS 

is  therefore  much  to  be  said  for  the  nationalisation  of 
these  natural  monopolies,  in  which  demand  and  supply 
are  as  constant  and  invariable  factors  as  in  the  case  of 
light  or  water. 

Where,  on  the  other  hand,  a  considerable  element  of 
risk  is  attached  either  to  the  demand  or  the  supply, 
State  control  will  not  so  easily  discharge  the  part  which 
is  now  played  by  private  competition.  The  exploita- 
tion of  an  oil  well,  for  example,  is  in  a  large  degree 
speculative  ;  the  probable  yield  is  uncertain  ;  the 
cost  of  production  is  uncertain  also  ;  and  nothing  but 
the  equally  uncertain  chance  of  big  returns  may  induce 
men  to  make  the  venture.  Again,  the  requirements  of 
the  consumer  are  changeable  and  by  no  means  easy 
to  predict.  The  manufacturer  cannot  estimate  in 
advance  the  value  of  some  novel  luxury  or  some  new 
invention.  It  may  take  the  public  fancy  ;  or  it  may 
prove  a  complete  fiasco.  Often  the  demand  for  a  thing 
is  not  felt  at  all,  until  the  supply  is  there  to  create  it. 
Even  our  military  chiefs  had  not  conceived  of  half  the 
uses  of  the  aeroplane  until  the  enterprise  of  private 
inventors  had  revealed  its  possibilities,  and  just  as  it 
required  the  strong  stimulus  of  war  to  arouse  in  them 
the  spirit  of  invention,  so  without  the  stimulus  of 
competition  there  would  be  little  to  disturb  the  con- 
servative habits  of  the  producer  or  to  break  him  from 
his  settled  methods  of  production.  Competition  is 
after  all  the  sovereign  remedy  against  stagnation,  and 
so  whereas  the  Socialist  official  falling  complacently 
into  the  groove  of  dull  routine,  would  be  content  to 
supply  the  obvious  needs  of  the  consumer  and  no  more, 
the  competitive  trader,  eagerly  intent  upon  new  profits 
may  lead  and  educate  the  public  taste  by  tentative 
experiments  and  bold  improvisations.  In  short,  it  is 
by  the  imagination  and  enterprise  of  the  few  rather 
than  by  the  conscious  demand  of  the  many  that   fresh 

conveniences  are  added  to  our  life  ?and    civilisation 

1  1 


THE  RIGHTS  OF  THE  INDIVIDUAL      229 

forges  patiently  ahead.  Were  we  forced  to  wait  for 
innovations  and  improvements  until  the  general  public 
is  aware  that  they  are  wanted,  we  might  very  well 
wait  till  Doomsday  ;  but  if  we  allow  the  capitalist 
his  chance  and  give  him  a  fair  lield  for  bold  initiative 
and  reasonable  profit  then  all  the  wealth  of  human 
ingenuity  will  be  at  our  disposal  and  we  shall  not  be 
kept  waiting  long. 

We  have  now  considered  under  three  different  aspects 
the  fitness  or  ability  of  the  people  to  undertake  the 
control  of  industry  and  to  fulfil  the  function  of  the 
dispossessed  capitalist.  Of  its  very  nature,  all  fore- 
cast of  the  future  must  be  guess-work  ;  but  so  far 
as  past  experience  can  prove  anything,  it  seems  that 
upon  two  of  those  counts  at  least  the  people  would  be 
found  wanting.  Under  the  Socialistic  State  we  may 
hope  (though  we  cannot  be  certain)  that  a  sense  of 
duty  and  loyalty  to  the  common  cause  would  supply 
the  stimulus  to  energy  and  zeal  which  is  now  supplied 
by  private  profit  ;  but  for  that  difficult  combination 
of  audacity  and  self-restraint  which  has  been  the 
mainspring  of  our  past  industrial  progress,  we  have 
found  no  substitute.  These  are  qualities  which 
legislation  and  organisation  alone  are  powerless  to 
produce.  It  requires  a  particular  environment  of 
economic  conditions  to  bring  them  out,  just  as  much 
as  it  requires  a  particular  environment  of  physical 
conditions  to  develop  the  craftiness  of  the  tiger  or  the 
docility  of  the  cow.  Education  may  do  something  ; 
but  education  of  the  class-room  is  not  in  itself  enough. 
It  is  only  in  the  hard  school  of  life  that  these  lessons  can 
be  learnt.  True  thrift  is  taught  not  by  compulsory 
economy  ;  but  by  the  painful  discipline  of  personal 
experience.  A  man  begins  to  value  the  importance  of 
doing  right,  only  when  he  has  seen  or  tasted  the  con- 
sequences of  doing  wrong.  Individual  virtues  are  the 
outcome   of   individual   responsibility  ;     and    however 


230  NEW  FALLACIES  OF  MIDAS 

comfortable  and  secure  the  socialistic  life  might  be, 
■we  know  that  responsibility  is  not  to  be  learnt  by  a 
servile  dependence  on  the  State. 

For  picture  what  kind  of  life  strict  Socialism  would 
offer.  From  the  beginning  to  the  end  of  a  man's 
career  his  path  will  be  made  easy  and  secure.  Employ- 
ment will  be  certain  ;  and  (if  Socialism  can  make 
good  its  claim)  a  decent  standard  of  remuneration 
will  be  certain  also.  He  will  not  need  to  make  pro- 
vision against  accident  or  sickness  ;  the  State  will 
see  to  that.  He  will  not  need  to  put  by  against  old 
age  ;  a  pension  will  be  assured  to  him.  He  will  not 
need  to  start  his  son  in  life  ;  the  public  service  will 
claim  them  as  it  has  claimed  himself,  and  will  allocate 
them  to  their  proper  stations.  There  will  be  no 
demands  upon  his  charity  ;  for  the  sick  and  needy 
will  have  passed  under  the  protection  of  the  State. 
In  a  hundred  ways  the  chances  and  accidents  of  life 
will  be  automatically  countered  ;  and  this  not  by  his 
own  forethought  and  discretion,  but  by  a  paternal 
authority,  which  will  shelter  him  even  from  the  con- 
sequences of  his  own  weakness  and  mistakes.  I  do  not 
say  that  such  a  life  will  not  be  happy  and  comfortable 
and  contented  ;  but  I  do  say  that  it  will  be  no  natural 
or  effective  training  ground  for  the  virtues  of  self- 
reliance  and  self-control.  The  normal  responsibilities 
of  man  will  be  lacking  in  it ;  for  responsibility  means 
liberty,  liberty  to  do  wrong  as  well  as  to  do  right,  to 
fail  as  well  as  to  succeed.  No  doubt  such  liberty  is 
dangerous  both  to  a  man's  own  self  and  to  his  neigh- 
bours ;  but  liberty  is  always  dangerous  ;  in  religion, 
in  marriage,  in  all  the  best  things  of  life,  the  man,  who 
is  free  to  choose,  runs  recklessly  into  risks  which  should 
appal  him,  and  before  which  he  might  well  hesitate  to 
trust  his  own  liberty  of  choice.  Yet  he  would  be  less 
than  a  man  who  on  that  account  would  shrink  from  the 
responsibility    of    choosing.     For  it   is   by    accepting 


THE  RIGHTS  OF  THE  INDIVIDUAL      231 

risks  that  character  is  made.  The  man  who  goes  on 
guiding  strings  through  life,  will  surely  be  found 
wanting  when  the  big  test  comes,  and  he  must  stand 
perhaps  alone.  The  Spartan,  well  drilled  and  moulded 
as  he  was  in  the  iron  discipline  of  Lycurgus,  often  broke 
out  into  licence  and  debauch  when  he  found  himself 
abroad  and  beyond  the  reach  of  the  State's  controlling 
hand.  From  the  behaviour  of  Germans  in  our  own 
day  the  same  moral  may  be  drawn.  There  is  no  easy 
road  to  Virtue  ;  and  if  the  State  attempts  to  man- 
facture  what  can  only  come  by  natural  growth,  it  will 
one  day  find  that  the  law-made  virtues  on  which  it 
counted  have  failed  it  at  its  need. 

(iv.) 

If,  then,  this  analysis  be  true,  Socialism  stands 
doubly  condemned.  Whether  regarded  as  a  moral 
education  or  solely  as  a  business  proposition,  it  is  alike 
found  wanting.  It  removes  the  natural  incentive 
to  enterprise  and  thrift ;  and  yet  puts  nothing  in  its 
place.  It  destroys  the  economic  liberty  of  the 
individual  ;  and  yet  offers  no  security  of  progress  to 
the  community  as  a  whole.  If  we  were  sure  that  by 
forfeiting  our  freedom  to  save  and  bargain  we  should 
indeed  bring  the  millenium  nearer,  the  sacrifice  might 
perhaps  be  worth  our  while.  But  if  Socialism,  while 
bringing  us  a  temporary  advantage,  were  to  end  in 
ultimate  stagnation,  then  we  should  repent  at  leisure 
of  our  premature  impatience  ;  for,  like  the  Arab  who 
has  killed  his  camel  to  extract  the  water  from  its  carcase, 
we  should  find  ourselves  satisfied  indeed  for  the  instant, 
but  no  longer  capable  of  travelling  to  our  journey's  end. 
And  is  it  in  truth  so  very  strange  if  this  instinct  for 
economic  liberty  should  prove  after  all  to  be  the  basis 
of  material  progress  ?  Even  the  abstract  laws  of 
conscience    and   religion    have    also   their   utilitarian 


232  NEW  FALLACIES  OF  MIDAS 

application.  There  is  a  sound  hygienic  principle 
underlying  the  observance  of  a  weekly  sabbath ;  honesty 
is  a  paying  policy  as  well  as  a  moral  duty  ;  and  with 
the  acceptance  of  the  Christian  code  of  ethics  life  has 
become  more  tolerable,  not  less.  So  if  the  normal 
human  being  feels  (as  beyond  doubt  he  does)  a  genuine 
desire  to  be  master  of  his  economic  fate,  not  that  he 
may  use  his  freedom  to  the  detriment  of  others,  but 
that  through  his  freedom  he  may  realise  his  own 
ambitions,  shape  his  own  course  through  life,  and  find 
for  himself  the  road  to  happiness,  then  we  may  be  sure 
that  this  instinct  is  a  sound  and  even  a  necessary 
impulse,  and  that  obedience  to  its  call  will  tend  no  less 
to  his  material  welfare  than  to  his  moral  good.  Even 
were  it  otherwise,  and  if  it  were  necessary  to  make  a 
choice  between  the  two,  we  cannot  in  reason  doubt 
what  our  choice  would  be.  The  individual  character 
is  of  more  account  than  the  prosperity  of  nations  ; 
and  to  gain  all  that  the  world  can  offer  of  comfort  and 
security  is  no  sufficient  compensation  for  the  loss  of 
what  ennobles  man.  If  the  truest  ideal  of  individual 
life  is  the  sacrifice  of  self,  yet  that  sacrifice  to  be  sacrifice 
at  all,  must  spring  from  the  individual's  own  free  will. 
Human  nature  can  only  rise  to  its  full  height,  when 
a  man  accepts  this  responsibility  of  freedom  and  uses 
it  humbly  in  the  service  of  his  fellows.  To  refuse  that 
responsibility  is  to  shrink  from  the  challenge  of  life, 
and  to  leave  human  nature  stunted  and  curtailed, 
and  the  greater  the  responsibility  accepted,  by  so  much 
the  more  will  the  reward  be  great.  At  the  entrance  of 
the  Needle's  Eye,  there  is  more  virtue  in  the  humility 
of  the  kneeling  camel  than  in  the  erect  posture  of  some 
lesser  beast. 


THE  RIGHTS  OF  THE  INDIVIDUAL      233 


NOTE    ON    THE    RATE    OF    INCREASE    OF 
AVERAGE  INCOMES  UNDER  THE  CAPITALIST      # 

SYSTEM. 

Some  striking  figures  have  been  compiled  by  Mr. 
Mallock,  which  give  us  the  opportunity  of  testing  the 
true  value  and  effect  of  redistribution  upon  socialist 
lines. 

Mr.  Mallock  takes  first  an  estimate  of  the  ideal 
average  of  income  per  head,  supposing  the  total 
wealth  of  the  country  to  be  equally  divided.  Next  he 
takes  the  average  income  per  head  actually  enjoyed 
by  the  poor  (the  class  that  is  supported  upon  wages  of 
;^i6o  per  year  and  under). 

Putting    the    two    estimates    side    by    side,    Mr. 
Mallock  arrives  at  the  following  result. 

A  B 

Average  income,  if  the  Average  income  of 

nation's  wealth  were       individuals  supported  on  less 
equally  divided.  than  ^l6o  per  annum. 


I80I 

;f20~- 

-^       v^'4 

1850 

£24 . 

._sr^  ^^y 

1880 

£35-- 

:i^>£24 

I9I0 

£45 

~~~>lM 

Thus  it  will  be  seen  that  the  "  ideal  income  "  which 
a  complete  redistribution  of  wealth  would  offer,  is 
reached  by  even  the  poorer  class  in  a  period  varying 
from  thirty  to  forty  years.  If  Socialism  failed  to  ensure 
a  continuation  of  this  normal  rate  of  progress,  the  poor 
man  would  actually  be  a  loser,  not  a  gainer  by  the 
deal.  In  the  future  moreover  we  may  expect  with 
reasonable  confidence  a  considerable  acceleration  of 
this  rate  of  progress.  It  would  not  be  at  all  surprising 
if,  all  going  well  and  the  population  remaining  station- 
ary, the  average  income  were  doubled  in  the  next 
thirty  years. 


Chapter  XVII 
COMPROMISE 

If  we  conclude  (as  I  think  we  must)  that  the  old 
economic  order  will  survive  the  shock  of  the  Socialist's 
attack,  and  if  much  of  the  world's  capital  continues  in 
the  future,  as  in  the  past,  to  rest  in  private  hands,  it 
does  not  follow  that  the  capitalist's  supremacy  will 
remain  altogether  unimpaired.  One  way  or  another 
there  are  sure  to  be  limitations  of  his  power.  Taxation 
for  instance  will  certainly  divert  a  larger  proportion  of 
his  income  into  the  public  purse.  His  privilege 
(already  much  curtailed)  of  handing  down  his  wealth 
intact  to  whomsoever  he  pleases,  will  probably  be 
curtailed  still  further.  But,  if  the  capitalist  is  wise, 
the  chief  limitations  of  his  power  will  be  voluntarily 
accepted  and  self-imposed.  Such  saciifice  (if  made 
in  the  right  spirit)  will  be  an  act  of  social  justice  and 
good  citizenship  rather  than  the  grudging  concessions 
of  a  threatened  despot.  If  the  workers  claim  a  share 
in  the  responsibilities  and  profits  of  industry  the 
capitalist  will  acquiesce  not  so  much  because  he  fears 
the  consequences  of  refusal,  but  because  he  recognises 
the  justice  of  their  claim.  His  chcice,  in  short,  will 
be  determined  not  by  necessity,  but  by  reason.  Nor 
need  we  doubt  that  the  worker  upon  his  part  will  be 
ready  to  listen  to  reason  also.  For  at  bottom  the 
normal  British  working-man  is  as  reasonable  as  any- 

234 


COMPROMISE  235 

body  else.  He  has  a  large  fund  of  instincti\e  common- 
sense  ;  intensely  conservative  in  his  habits,  seldom 
for  long  the  dupe  of  passion  or  illusion,  and  possessing 
a  shrewd  grasp  of  practical  issues,  he  has  no  great  liking 
for  political  chimeras.  His  speech,  it  is  true,  often 
belies  his  instincts  ;  for,  though  his  grievances  are 
real  enough,  he  is  a  poor  hand  at  expressing  them  in 
words  ;  and  if  he  often  takes  a  grim  pleasure  in  the 
over-statement  of  his  wrongs,  and  in  applauding  the 
exaggerated  claims  of  revolutionary  enthusiasts,  that 
is  a  common  failing  of  mob  psychology.  His  true 
grievance  is  simply  this  ;  that  he  is  not  treated  as  a 
responsible  being.  Given  a  job  to  do,  he  is  not  con- 
sulted how  it  should  be  done  ;  asked  to  work  overtime 
or  to  make  a  special  effort,  he  gets  no  thanks  ;  and  if 
he  does  his  work  well  and  thereby  improves  or 
accelerates  the  output,  he  does  not  touch  a  penny  of 
the  extra  profit.  In  a  word,  he  is  used  as  a  tool  or  a 
thing,  and  not  as  a  man  with  a  will  and  a  soul  of  his 
own.  And  all  the  while  he  knows  that  business  might 
be  conducted  upon  different  lines  ;  he  knows  that, 
were  he  given  responsibility  he  could  justify  the  trust. 
He  knows  that  industry  might  be  again  what  once  it 
was,  a  partnership  between  the  master  and  the  man. 
If  then  he  thought  that  the  capitalist  were  willing  to 
acknowledge  that  partnership,  we  should  hear  no  more 
talk  of  sweeping  the  capitalist  away.  For  the  working 
man  knows  well  enough  that  the  capitalist  understands 
the  management  of  industry  and  that  he  himself  does 
not.  And  to  the  capitalist  he  will  readily  leave  it  if 
the  capitalist  will  allow  to  himj  also  his  due  share  of 
responsibility  and  trust.  For  there  is  one  special 
part  of  industry  which  every  working  man  docs 
understand,  and  that  is  his  own  part ;  and  if  over  that 
part  at  least  he  were  given  a  limited  control,  he  would 
perform  it  well  content.  For  while  his  reason  tells  him 
that  brains  and  hands  have  each  their  separate  function, 


236  NEW  FALLACIES  OF  MIDAS 

it  also  tells  him  that  neither  has  the  right  to  tyrannise 
over  the  other.     If  both  parties  are  reasonable,  com- 
promise can  never  be  far  off,  for  compromise  is    the 
triumph  of  reason  ;  and  the  first  step  towards  industrial 
unity  is  to  understand.     More  than  half  the  bitterness 
and   friction   that   exists   between   the   men   and   the 
masters  comes  from  an  inability  to  appreciate  each 
other's  point  of  view.     Misunderstandings  often  arise 
from  the  most  trivial  causes.     Because  an  employer 
has  not  the  leisure  to  mix  among  his  men,  because  he 
fails   to   show   some   sympathy    where   sympathy    is 
needed,  perhaps  even  because  he  neglects  to  recognise 
his  employees  in  the  street,  they  are  up  in  arms  against 
him  and  interpret  his  conduct  as  churlish  indifference. 
The  employer   in  his  turn,  conscious  of  the  changed 
feeling,   but  ignorant  of  its  cause,   sets  all  down    to 
insubordination     and     unreasoning     discontent ;      so 
instead  of  conciliating  he  endeavours  to  repress  ;    bent 
upon  upholding  his  authority   he   will    not    listen    to 
reason;    the  workers'  demands,  however,  just  will  be 
denied  a  hearing  ;    suspected  ringleaders  will  be  dis- 
missed ;    and  thus  the  temper  on  both  sides  grows 
gradually  harder.     When,  in  this  tainted  atmosphere 
of  suspicion  and  distrust,  more  serious  disputes  and 
differences  arise,  the  natural  consequences  will  follow  ; 
immoderate  claims  on  one  hand,  stubborn  opposition 
on  the  other,  and  too  often,  in  the  issue,  charges  of 
broken  faith  on  both.     So  the  breach  widens  and  before 
it  can  be  healed,  there  must  be  a  new  spirit  and  a 
changed  temper  on  both  sides.    Yet  to  despair  of  such 
a  change  would  be  to  lose  faith  in  the  English  character. 
There  have  been  bitter  feuds  and  sharp  antagonisms 
enough  in  the  history  of  our  national  development. 
But  the  same  reasonable  spirit  which  served  in  the  past 
to  reconcile  the  causes  of  Protestant    and    Catholic, 
landlord     and    peasant.    Round-head    and    Royalist, 
Tory  and  Democrat,  has  never  failed  us  yet ;   nor  will 


COMPROMISE  237 

it  fail  us  now  ;  and  even  if  we  seem  to  be  drifting 
heedlessly  towards  a  critical  impasse,  that  has  always 
been  the  English  way  ;  and  it  is  none  the  less  certain 
that,  before  it  is  too  late,  our  traditional  genius  for 
compromise  will  awaken  and  carry  us  safely  through. 

(ii.) 

We  have  endeavoured  hitherto  to  trace  the  course  of 
the  industrial  conflict  and  to  understand  the  issues 
upon  which  that  conflict  turns.  Can  we  now  foretell 
the  probable  solution  or  guess  what  form  the  com- 
promise will  take  ?  Such  prophecy  cannot  be  easy. 
There  are  three  rival  claims  to  reconcile,  the  capitalist's, 
the  worker's,  and  the  State's  ;  and  the  relative  strength 
of  these  three  rivals  depends  upon  the  chances  of  an 
uncertain  future.  From  year  to  year  the  balance  of 
power  is  shifting ;  and  the  economic  forces  which 
control  it  defy  strict  calculation.  Still  less  can  we 
foresee  under  what  circumstances  and  in  what  temper 
the  disputants  will  meet  to  negotiate  the  peace,  we 
cannot  tell  whether  the  terms  will  be  dictated  by  the 
triumph  of  the  strongest  or  whether  the  settlement 
will  come  through  mutual  concession  and  forbearance. 
Nevertheless,  having  regard  to  the  abstract  justice  of 
the  three  rival  claims,  we  can  at  least  hazard  an  outline 
picture  of  the  ideal  compromise  ;  and  in  such  a  com- 
promise the  theories  of  Socialist,  Individualist  and 
Syndicalist  alike  will  each  claim  some  share  ;  for 
each,  as  we  have  seen,  contains  some  measure  of  the 
truth.  The  Socialist  rightly  asserts  the  paramount 
interest  of  the  community  in  the  regulation  of 
supplies ;  therefore  we  shall  recognise  the  State's 
authority  to  exercise  a  supervisory  control  over  the 
entire  business  of  production  and  consumption.  The 
Individualist  asserts  the  liberty  of  every  citizen  both  to 
bargain  and  to  save  ;  therefore  (within  the  limits  which 


238  NEW  FALLACIES  OF  MIDAS 

the  State  permits)  we  shall  allow  to  the  capitalist 
liberty  in  the  disposition  of  his  savings,  and  to  the 
worker  liberty  in  the  use  of  his  bargaining  power.  The 
Syndicalist  asserts  the  claim  of  every  producer  to  share 
the  responsibilities  and  profits  of  production  ;  there- 
fore we  shall  allow  to  capitalists  and  worker,  as  joint- 
partners  in  production,  the  right  to  exercise  control 
over  their  separate  spheres  ;  the  capitalist  over  the 
larger  policies  of  industry  and  trade,  the  worker  over 
the  conditions  and  practical  organisation  of  his  work. 
In  a  word,  we  must  temper  service  with  liberty  and 
liberty  with  service,  and  unite  the  several  members  of 
the  economic  body  in  willing  co-operation,  while 
leaving  to  each  the  free  performance  of  their  natural 
functions.  What  will  be  the  sphere  of  each  and  what 
the  limits  of  their  power,  it  must  be  our  next  business 
to  define  more  closely. 

(i)  What  then  will  be  the  sphere  of  the  State  ? 
First,  over  certain  branches  of  production  it  will 
exercise  absolute  control.  These  are  the  "  natural 
monopolies  "  above  mentioned,  in  which  since  demand 
is  constant  and  the  supply  secure,  competition  is  super- 
fluous and  wasteful.  Some  of  them  the  State  controls 
already  ;  the  Postal  service,  the  Telegraph,  and  in  a 
less  degree,  public  health  and  education.  Besides 
these  the  supply  of  water,  gas  and  electric  light 
is  for  the  most  part  even  now  in  the  hands  of  the 
community,  as  represented  by  local  Boards  and 
Councils.  In  the  future  however.  State  control  will  no 
doubt  be  extended  further,  over  the  railways  cer- 
tainly, and,  as  some  think,  over  the  mercantile  marine. 
Whether  the  mines,  too,  will  become  national  property 
is  a  more  controversial  question ;  the  consumer's 
interest  seems  to  demand  it ;  but  on  the  other  hand  it 
must  be  remembered  that  in  the  exploitation  of  mines 
there  is  a  distinct  element  of  financial  risk,  and  for  this 
reason  private  enterprise  is  likely  to  be  more  efficient 


1 


COMPROMISE  239 

and  productive.*  There  will  no  doubt  be  other 
industries  over  which  the  same  controversy  will  be 
waged  ;  but  generally  speaking  the  burden  of  proof 
will  lie  with  the  Socialists  ;  and  unless  the  advantages 
of  State  control  are  definitely  established,  the  Govern- 
ment will  do  well  to  leave  the  industries  in  private 
hands.  This  brings  us  to  our  second  point ;  and  forces 
us  to  ask  what  will  be  the  relation  of  the  State  towards 
competitive  production,  and  to  what  extent  will  it  seek 
to  interfere  between  the  Capitalist  and  the  workers. 
The  answer  plainly  is  that  the  State  will  interfere  as 
little  as  may  be.  By  hypothesis,  the  individual,  be. 
he  capitalist  or  worker,  will  be  free  to  bargain  as  he 
pleases  ;  and  any  habitual  interference  of  the  State 
in  the  matter  of  prices,  wages  and  profits  generally 
would  be  a  fatal  encroachment  on  that  liberty.  Where 
however  the  liberty  is  used  (as  it  may  be  used)  in  a 
manner  which  is  clearly  detrimental  to  the  public 
interest,  then  it  will  be  not  only  legitimate,  but 
necessary  for  the  State  to  interfere.  For  example,  if 
the  frequency  of  strikes  cr  lockouts,  or  the  magnitude 
of  a  particular  strike  or  lock-out,  causes  serious  incon- 
venience to  the  consumers,  the  Government  may 
impose  its  veto  with  perfect  justice  and  enforce  a 
settlement  by  compulsory  arbitration  :  for  all  abuse 
of  liberty  when  objectionable  to  society  at  large, 
becomes  a  crime,  and  all  crime  it  is  the  Law's  function  to 

♦  There  is  another  consideration  which  seems  to  point  a  different 
way,  and  which  would  lead  to  a  Syndicalist  rather  than  a  Socialist 
solution  of  the  coal-mine  problem.  Although  the  financial  risk  of 
mining  is  borne  by  the  mine-owner,  another  yet  more  vital  risk  is  borne 
solely  by  his  employees — I  mean  the  personal  risk  to  life  and  limb. 
Even  a  high  wage  seems  scarcely  an  adequate  compensation  for  the 
dangers  which  these  men  run  ;  and  that  the /lyo/J/s  of  their  risk-taking 
should  go  to  a  man  who  does  not  share  it,  seems  less  than  justice. 
There  is  therefore  much  to  be  said  for  the  scheme  whereby  the  mine- 
owner  would  be  content  to  receive  some  fixed  standard  of  remuneration, 
while  allowing  the  miners  themselves  to  make  what  surplus  profit  they 
can  out  of  their  perilous  occupation.  The  same  argument  would 
perhaps  be  equally  applicable  to  the  Mercantile  Marine. 


240  NEW  FALLACIES  OF  MIDAS 

prevent.     Again,  the  State  will  have  a  direct  interest 
in  maintaining  the  efficiency  of   national  production  ; 
and  its  further  interference  will  be  called   for,    when 
that  efficiency  is    seriously    impaired    by  the    conse- 
quences     of     unrestricted    competition.       Thus,     if 
Capital  seeks  to  reward  Labour  with  less  than  a  living 
wage,  the  State  will  have  a  word  to  say.     For  it  is 
obvious  that  to  maintain  an  industry  whicJti  cannot  or 
will  not  offer  a  decent  livelihood  to  its  employees, 
is  bad  national  economy  ;   since  the  national  efficiency 
depends  upon  the  health  and  vigour  of  its  citizens  and 
therefore  upon  the  standard  of  life  which  they  enjoy. 
Capital  then  cannot  be  permitted  to  secure  its  profits 
at  the  price  of  the  people's  health.     Nor  upon  the  other 
hand  can  organised  Labour  be  allowed  to  misuse  its 
power  at  the  expense  of  Capital.     We  know  that  a 
certain  minimum  standard  of  remuneration  is  necessary 
if  individuals  are  to  be  induced  to  save  at  all ;    so  to 
deprive   Capital   of  its  rightful  share  of  profits  is  a 
suicidal  policy  which  will  either  discourage  men  from 
saving   altogether   or  will  drive  them  to  invest   their 
capital    abroad.     It    will    therefore    be    the     State's 
duty  to  defend  the  rights  of  Capital  no  less  than  the 
rights   of  Labour,  and   a   sane   public  opinion  would 
undoubtedly  refuse  to  endorse  the  exorbitant  demands 
of  labour,  should  such  demands  in  fact   be  made.      If 
(as  is  likely    enough)   there  are  industries  which  will 
prove  incapable  of  supporting  this  two-fold  burden, 
these   must   either   abandon   the   struggle   and   cease 
working  or  (if  considered  indispensable  to  the  com- 
munity's existence)  must  be  bolstered  up  by   a  system 
of  State  aids   or   bounties.     To   this,  however,   there 
would  be  one  inevitable  corollary.     Wherever  bounties 
are  accepted,  a  corresponding  obligation  is  incurred  ; 
and  if  a  particular  industry  or  a  particular  group  of 
employers    is    guaranteed    against    the    accidents    of 
demand  or  against  the  stress  of  foreign  competition, 


I 


COMPROMISE  241 

then  they  cannot  possibly  deny  the  State's  right  to 
investigate  their  methods,  and  insist  upon  a  proper 
use  of  their  resources.  How  far  the  State  would  exer- 
cise this  right  would  depend  on  circumstances  ;  the 
scope  of  its  authority  would  naturally  be  in  proportion 
to  the  assistance  which  it  gave.  Were  it  for  instance 
to  undertake  (as  Sir  Leo  Chiozza  Money  thinks  it 
should)  the  entire  organisation  of  the  country's  food 
supply,  buying  the  produce  from  the  farmers  at  a 
bonus  price  and  handing  it  on  in  turn  to  the  retailers, 
then  it  is  clear  that  the  State  would  be  in  a  very  strong 
position.  The  same  national  necessity  which  make 
it  needful  to  encourage  British  agriculture,  demands 
also  that  British  agriculture  should  be  efficiently 
conducted  ;  not  only  would  the  State  supervise  the 
teaching  of  agricultural  science,  subsidise  chemical 
research,  provide  co-operative  machinery,  and  indicate 
the  best  methods  of  increasing  our  production  ;  but 
it  would  have  every  right  to  insist  upon  its  advice  being 
taken  ;  it  could  press  the  farmers  to  make  use  of  these 
facilities  and  even  penalise  culpable  inefficiency  or 
waste.  Industries  less  dependent  on  public  aid  would 
not  be  equally  at  the  beck  and  call  of  government 
departments.  The  degree  of  State  control  would 
vary,  as  it  varies  among  secondary  schools  and  uni- 
versities which  receive  financial  grants  from  the 
Exchequer.  But  in  any  case  the  State's  right  of 
interference  would  not  relieve  the  individual  farmer 
or  capitalist  of  his  personal  responsibility.  For  he 
would  not  as  under  Socialism,  be  the  State's  servant ; 
nor  would  the  State  be  owner  of  factory  or  farm. 
Where  each  had  a  stake  responsibility  would  be  shared  ; 
and  both  would  be  working  in  co-operative  partnership 
for  the  good  of  the  community  at  large. 

To  such  a  course  there  are  however  many  draw- 
backs, the  more  liberal  school  of  politicians  are  strongly 
opposed  to  it  ;   and  hitherto  at  least  they  have  received 


242  NEW  FALLACIES  OF  MIDAS 

the  backing  of  the  nation.  The  events  of  the  next  few 
years  (and  more  particularly  the  terms  of  the  peace 
settlement)  will  decide  the  issue.  If  complete  victory 
is  granted  to  the  allied  cause,  we  may  be  almost 
certain  that  the  Free  Traders  will  have  their  way. 
They  hold  that  it  is  not  only  unnecessary  to  prop  up 
home  industries  by  artificial  means,  but  also  positively 
un-uise,  and  they  are  not  without  logical  grounds  for 
their  belief.  Economic  self-sufficiency,  they  argue,  may 
seem  at  first  sight  to  offer  us  greater  security  in  time  of 
war  ;  but  in  actual  fact,  it  has  been  otherwise.  It  was 
our  very  dependence  upon  the  supplies  from  overseas, 
that  built  up  for  us  a  mercantile  marine  capable  of 
maintaining  the  welfare  of  our  population  and  the 
efficiency  of  our  armies  throughout  these  years  of 
stress  ;  and  had  we  endeavoured,  as  the  enemy  have 
done,  to  be  self-contained  and  self-supporting,  it  can 
hardly  be  doubted  that  we  should  have  suffered  the 
same  scarcity  and  privations  that  they  ha\e  done. 
We  may  expect  therefore  that  in  the  future  not  only  we 
ourselves,  but  other  nations  too  (upon  the  Allied 
side  at  least)  will  welcome  more  and  more  a  free  inter- 
change of  commerce,  each  producing  that  which  by  its 
resources  and  abilities  it  is  best  fitted  to  produce,  and 
each  looking  upon  the  activity  and  enterprise  of  others 
as  complementary  rather  than  antagonistic  to  its  own. 
Free  Trade  is  after  all,  the  economic  counterpart  to  a 
league  of  free  peoples ;  and,  commercial  inter- 
dependence is  the  surest  guarantee  of  the  world's 
peace.  The  wise  government  therefore  will  allow 
national  industry  to  follow  its  natural  course.  Some 
special  facilities,  where  such  are  needed,  it  will  doubtless 
be  prepared  to  give.  A  natural  monopoly  (such  for 
instance,  as  the  milk  supply)  which  the  Government 
does  not  wish  to  take  into  its  own  hands  it  may  well 
place  in  a  privileged  position,  and  regulate  in  much  the 
same  manner  as  it  regulates  the  private  gas  companies 


COMPROMISE  243 

to-day.  But,  for  the  rest,  the  State  will  not  seek  to 
meddle  in  affairs  which  are  not  its  own  ;  rather,  it 
will  leave  the  enterprise  of  individuals  to  find  a  natural 
outlet.  At  home,  it  will  not  foster  one  trade  or  assist 
one  class  at  the  expense  of  others.  It  will  enforce  no 
special  policy  upon  them,  and  take  no  sides  against 
particular  countries  abroad. 

As  between  employees  and  employed,  the  State  will  be 
an  impartial  witness  of  the  industrial  tug-of-war.  It  will 
not  endorse  the  claims  of  the  workers,  because  the 
workers  are  numerous  ;  neither  will  it  favour  the 
capitalist  because  the  capitalist  is  powerful.  Demand 
and  supply  will  still  continue  (except  for  the  limitations 
above  mentioned)  to  regulate  the  market.  The  rise 
and  fall  of  wages  and  profits  will  not  be  governed  by  the 
arbitrary  justice  of  some  State  Department ;  but  by 
the  natural  working  of  economic  laws.  The  reforms 
of  the  future  will  not  proceed  from  political  agitation 
nor  from  a  tyrannical  use  of  the  majority  vote,  but 
rather  from  a  mutual  good- will  and  agreement  between 
capitalist  and  worker  ;  and  to  the  relations  which  will 
exist  between  these  two  we  now  must  turn, 

(2)  First  and  foremost,  it  is  clear  that  the  general 
control  of  industrial  policy  will  lie  with  the  capitalist.* 
His  right  of  choice  in  the  disposition  of  his  savings  we 
have  already  seen  to  be  an  essential  feature  jf  a  free 
economic  society,  and  that  right  must,  within  limits, 
be  secure  to  him.  Besides  this,  he  will  be  naturally 
fitted,  both  by  character  and  by  training  for  the 
organisation  of  business.  No  working  man  in  his 
senses  ever  denied  the  value  <.f  brains,  and  the  man 
who  rises  to  a  position  of  command  in  business  as  in 
other  walks  of  life,  must  needs  possess  a  natural  genius 
for  his  task  ;  the  less  he  is  hampered  in  the  use  of  his 
qualities,  the  more  he  will  be  likely  to  achieve  success, 

♦   Ultimately,  as  will  later  appear,  tliis  class  will  come  to  include 
employees  as  well  as  employer. 


244  NEW  FALLACIES  OF  MIDAS 

It  is  for  the  capitalist  therefore  to  initiate  and  direct 
the  policy  of  his  business,  to  keep  a  watch  on  the  world 
markets,  and  adjust  his  methods  to  their  fluctuations, 
to  co-ordinate  the  working  of  the  several  departments 
and  select  their  heads,   to  confer  with  experts    and 
appraise  the  value  of  inventions  and  improvements, 
and  above  all  to  supervise  the  whole  financial  system 
from  the  framing  of  the  annual  budget  down  to   the 
purchase  of  a  new  machine.     He  takes  his  natural  place 
as  it  were  captain  of  the  ship,  whose  duty  it  is,  while 
others  trim  the  sails  or  stoke  the  engines,  to  ^et  his 
compass  for  the  port,  calculate  distances,  and  resolve 
what  course  the  ship  shall  take,  and  who,  from  his  point 
of  vantage  on  the  bridge,  can  bring  her  safe  through 
dangers  of  reef  and  current  of  which  his  subordinates 
are  but  dimly,  if  at  all,  aware.     The  capitalist  then  will 
will  still  remain  a  comnianding  and  powerful    figure 
in  the  economic  world.     It  is  true  no  doubt  that  the 
inevitable  tendency  of  modern  finance  is  apt  to  dim- 
inish the  direct  and  personal  control  of  individuals. 
Industries  are  being  grouped  in  vaster  units  and  run 
on   more  comprehensive  lines.     Already  small    firms 
are  being  crushed  out  or  absorbed  by  bigger  houses. 
Shipping  lines  are  amalgamating  :    so  are  the  banks. 
It  is  the  same  in  every  section  of  industry.     And  one 
result  of  such  a  development  is   obvious.     The  indi- 
vidual  capitalist   can   no   longer   remain   in   absolute 
control  of  these  large-scale  concerns.     They  are  run 
extensively    on    capital    borrowed    from    numerous 
investors  ;    they  are  organised  and  administered  by 
salaried  managers  ;   and  the  original  proprietor  retains 
little  more  than  a  controlling  share  in  the  company's 
finance  and  a  place  on  the  directors'  board.     Yet  even 
so  his  power  is  still  considerable.     Whether  he  remains 
(as  in  very  many  instances  he  does)  the  actual  manager 
and  business  head,  or  whether  he  delegates  this  task 
to  others,  admits  the  investing  public  into  partnership. 


COMPROMISE  245 

and  merely  watches  the  use  and  disposition  of  his 
capital  with  a  remote  but  jealous  eye,  there  is  none 
the  less  for  the  capitalist  responsibility  enough  ;  his 
obligation  cannot  be  shirked  ;  and  while  he  has  a  trust 
to  perform  to  other  shareholders,  he  has  an  even  greater 
duty  towards  men  in  his  employ.  It  is  according  to 
his  method  of  discharging  this  duty,  that  the  true 
success  or  failure  of  his  management  is  to  be  measured. 
The  wise  ship's  captain  who  understands  the  art  of 
leadership,  knows  that,  if  he  is  to  deserve  his  crew's 
confidence,  he  must  give  them  his  ;  and  so,  too,  the 
employer  will  recognise  that  he  cannot  get  the  best  out 
of  his  men  unless  he  allows  them  to  share  responsibility 
with  him.  This  he  may  do  in  two  ways.  First,  he 
will  consult  them  freel}^  upon  all  points  where  their 
own  interests  are  affected.  Not  many  years  ago  it  was 
thought  beneath  the  dignity  of  an  employer  to  enter 
into  such  relations  with  his  men.  In  1911,  the  Railway 
Unions  went  out  on  strike  because  the  Company 
Directors  refused  to  meet  their  representatives  or 
even  to  acknowledge  their  existence.  But  there  has 
been  a  significant  change  since  then.  During  the  war 
industrial  committees  have  been  set  up  in  which  men 
and  masters  sit  side  by  side.*  The  advantages  are 
twofold  ;  the  masters  may  often  obtain  valuable 
advice  concerning  the  details  of  organisation,  and  learn 
the  simplest  and  most  agreeable  method  of  getting  the 
work  done.  On  the  other  hand,  the  men  will  be  better 
able  to  appreciate  the  difficulties  of  their  employer,  and 
to  take  a  long-sighted  view  of  plans  and  projects,  and  by 
means  of  this  greater  knowledge  to  reconcile  their 
fellow  Unionists  to  necessary  changes.  Thus,  when 
during  the  war  the  scarcity  of  cotton  compelled  the 
mill-owners    to  curtail  the  working  hours,  the  repre- 

•  In  adopting  the  recommendations  of  the  Witley  Report  (1Q17),  the 
Government  propose  to  apply  this  principle  to  all  industries  under 
their  control. 


246  NEW  FALLACIES  OF  MIDAS 

sentatives  of  the  mill-hands,  sitting  in  consultation 
with  them,  were  given  a  clear  statement  of  the  whole 
position,  and  so  were  able  to  convince  the  others  that 
this  step  was  due  to  actual  deficiencies  of  raw  material 
and  not  to  the  selfish  policy  of  the  employers.  Such  a 
reform,  however,  will  not  in  itself  suffice,  unless  it  be 
followed  by  another  ;  a  large  measure  of  self-govern- 
ment must  also  be  conceded  to  the  work-shop.  Experi- 
ments have  already  been  made  in  leaving  the  control 
of  discipline  and  conditions  in  the  hands  ^f  the 
employees  ;  and  these  have  met  with  astonishing 
success.  They  have  proved  beyond  question  that  the 
workers  can  be  trusted  to  settle  questions  of  pro- 
motion and  dismissal  fairly,  to  vote  on  working  hours 
and  holidays  without  prejudice  and  (most  important 
of  all)  to  choose  the  right  men  to  be  their  own  officers. 
This  last  is  a  vital  principle  of  reform.  Past  experi- 
ence has  shown  that  the  foremen  appcinted  by  a 
manager  are  generally  far  more  unsympathetic  towards 
the  rank  and  file  than  the  manager  himself.  It  is  not 
altogether  their  own  fault ;  for  the  foreman's  is  a 
difficult  position,  and  on  him  falls  all  the  odium  of  carry- 
ing out  unpopular  instructions.  In  any  case  he  is  too 
often  the  cause  of  much  unnecessary  friction  ;  but 
with  stewards  holding  their  authority  in  part  at  least 
by  popular  election,  the  danger  of  friction  would  be 
greatly  eased.  They  would  form  a  connecting  link 
between  men  and  masters,  being  answerable  to  both. 
And  there  would  be  little  real  danger  that  either  the 
stewards  themselves  would  betray  the  trust,  or  that 
those  beneath  them  would  challenge  their  authority. 
All  sane  men  are  fully  conscious  of  the  need  for  discipline, 
and  though  they  may  resent  it  when  imposed  upon 
them  from  above,  yet  such  hostility  would  cease,  if  the 
responsibility  for  maintaning  it  were  placed  upon 
themselves.  The  autonomous  work-shop  would  in 
fact  reproduce  in  many  features  the  prefect  system  of 


COMPROMISE  247 

our  public  schools,  with  which  it  has  often  been 
compared,*  And  this  system  is  a  serviceable  model  as 
well  as  a  sound  analogy  ;  for  it  is  something  more  than 
an  antidote  for  insubordination  or  a  safety  valve  for 
discontent.  It  is  an  education  in  itself,  a  training  in 
responsibility  which  can  develop,  as  nothing  else  can, 
that  special  genius  of  the  English  race,  the  capacity 
"  to  govern  and  be  governed,"  which  is  the  true  secret 
of  our  national  liberty  and  greatness. 

3.  It  remains  for  us  to  ask  how  far  this  compromise 
will  satisfy  the  workers.  \Vill  they  be  willing  upon 
these  conditions  to  accept  the  supremacy  of  the 
capitalist  ?  Or  will  they  still  desire  to  be  rid  of  him 
altogether  and  to  remove  the  objectionable  necessity  of 
service  ?  Now  in  answering  this  question  it  must  first 
be  said  that  if  industry  is  to  be  carried  on  at  all,  it  must 
be  organised;  and  organisation  is  impossible  without 
discipline  and  authority.  Capitalist  or  no  capitalist 
somebody  must  command  and  somebody  must  obey  : 
and  there  seems  no  real  reason  for  supposing  that 
obedience  to  a  Socialist  Government  or  to  a  Syndicalist 
Guild  would  be  more  agreeable  to  the  individual  than 
obedience  to  a  capitalist  employer.  Indeed  the  latter 
might  easily  appear  to  be  the  lesser  of  two  evils  ;  for 
whereas  there  would  be  no  alternative  to  the  service  of 
Guild  or  Government,  the  employee  who  is  dissatisfied 
with  one  master  is  always  free  to  seek  service  with 
another.  In  theory  at  least,  he  has  the  option  between 
continuing  his  contract  or  closing  it,  he  has  therefore 
no  just  cause  to  quarrel  with  a  contract  which  is  made 
of  his  free  choice.  That  contract  it  is  true  is  a  contract 
of  service  ;  and  since  under  no  system  can  we  all  be 
masters,  some  must  of  necessity  accept  a  lower  room. 
There  is  nothing  derogatory  about  service,  the  soldier 

♦  Mr.  Selfridge  has  adopted  tho  very  phrase  in  thn  attempt  to 
institute  a  system  of  self-government  among  h's  own  emplo3'ees.  See 
his  recent  book  on  tlie  "  Romance  of  Commerce." 

17 


248  NEW  FALLACIES  OF  MIDAS 

must  render  service  to  his  general,  the  clergyman  to  his 
bishop,  even  the  cricketer  to  the  captain  of  his  team  ; 
and  there  is  no  reason  in  the  world  why  the  working 
man  should  object  to  engaging  himself  to  a  master,  if 
the  terms  of  the  engagement  are  reasonable  and  just. 
Provided  that  these  terms  allow  him  such  a  measure  of 
responsibility  or  independence  as  we  have  described 
above,  there  remains  but  one  point  to  which  the 
working  man  might  fairly  take  exception  ;  and  that 
is  the  question  of  profits. 

We  need  not  here  repeat  the  reasons  already  given  for 
his  dissatisfaction  with  the  present  system,  except  to 
say  that  they  seem  often  real  enough.  But  let  us 
restate  the  problem  in  its  simplest  form.  There  are 
three  agents  in  production  ;  first  the  hand-labour  of 
the  artisan,  second  the  head-labour  of  the  managing 
directors,  and  third  the  mechanical  paraphernalia 
which  represents  invested  capital ;  and  of  these  the 
last  two  are  frequently,  but  not  always,  united  in  a  single 
person  or  a  group  of  persons.  Now  the  first  claim 
upon  the  proceeds  of  production  is  naturally  the 
worker's  ;  whatever  happens,  his  wages  must  be  paid. 
If  there  is  a  salaried  manager,  his  share  is  equally  secure. 
The  surplus,  when  these  deductions  have  been  made, 
goes  to  the  capitalist,  and  this  on  the  face  of  it  seems 
fair,  seeing  that  his  claim  can  only  be  considered  when 
the  other  two  are  satisfied,  and  that  the  risk  is  therefore 
almost  entirely  his.  But  though  to  this  extent  his 
claim  to  the  surplus  is  well  founded,  yet  there  is 
another  side  to  the  question.  After  all  it  is  not  the 
capitalist  that  has  himself  produced  the  surplus. 
Any  increase  in  the  output  of  the  factory  is  not  due 
to  him  ;  it  is  due  to  the  skill  of  the  management  and 
to  the  energy  of  the  workers.  Naturally  then  the 
workers  will  ask  why  they  should  work  extra  hard  that 
the  capitalist  may  be  enriched  ;  and  why  they  should 
have  no  share  in  that  which  their  extra  labour  has 


COMPROMISE  249 

produced.  If  production  is  indeed  to  be  considered 
as  a  partnership  between  capital  and  labour,  then  it 
seeras  that  there  must  also  be  a  fair  division  of  the 
spoils.  Profit-sharing  or  co-partnership  is  no  new 
invention.  It  is  an  experiment  which  has  frequently 
been  tried  ;  but  for  one  reason  or  another  it  has 
more  often  met  with  failure  than  success.  The  cause 
of  the  break-down  however  has  arisen,  not  from  any 
inherent  weakness  of  the  scheme  itself,  so  much  as  from 
the  practical  difficulties  of  its  application.  It  has 
failed,  partly  because  the  workers  are  not  easily  con- 
vinced that  their  own  share  is  proportionate  to  their 
deserts  ;  but  even  more  because  they  mistrust  the 
fundamental  honesty  of  the  capitalist's  intentions. 
They  will  not  readily  believe  in  the  goodwill  of  a  man 
whom  they  have  learnt  to  regard  as  their  natural 
economic  enemy ;  and  they  see  in  every  offer  of 
co-partnership  a  stratagem  for  extracting  a  maximum 
of  work  by  a  cheap  and  wholly  inadequate  concession.* 
Such  suspicions  may  or  may  not  be  well  founded  ; 
but  though  under  the  present  circumstances  they  seem 
to  be  a  fatal  bar  to  all  profit-sharing  schemes 
whatsoever,  that  is  no  reason  for  condemning  such 
schemes  outright.  Once  the  ground  for  suspicion  is 
removed,  and  a  mutual  confidence  is  re-established, 
a  basis  for  compromise  and  equitable  partition  could 
undoubtedly  be  found. 

For  all  this  it  cannot  be  easy,  indeed,  it  is  quite 
impossible  to  satisfy  both  parties,  unless  both  are 
prepared  when  needful,  to  make  some  sacrifice  for  the 
common  cause.  Most  often  the  burden  of  sacrifice 
will  fall  on  the  employer.  For,  it  must  be  remember- 
ed that  if  being  something  more  than  a  mere  investor, 
he  manages  the  business  by  personal  direction,  he  has 
in  fact  a  verj'  real  claim  upon  the  larger  portion  of  the 

♦  The  practical  dilficulties  of  Profit  sharing  and  Co-partnorsliip  are 
more  fully  explained  in  the  note  at  the  end  of  this  chapter. 


250  NEW  FALLACIES  OF  MIDAS 

profits.  What  contributes  most  to  the  success  of 
industrial  enterprise  is  not  the  hand-labour  of  the 
men,  but  the  brain  labour  which  organises  and  directs 
it.  It  is  by  thought  and  calculation  and  foresight 
that  large  economies  are  effected,  processes  improved, 
new  machinery  installed  ;  in  these  and  in  a  hundred 
other  ways  one  skilful  organiser  can  do  more  toK increase 
the  profits,  than  the  industry  and  efficiency  of  a 
thousand  factory  hands.  So  the  employer's  claim  to 
the  larger  share  of  profits  is  genuine  enough  ;  and  if 
money-making  were  his  only  object,  there  would  be 
justice  in  it  too.  But  we  know  that  profit  is  not  the 
only  spur  to  effort  and  endeavour.  There  is  many  a 
man  working  for  a  fixed  salary,  who  will  do  his  best 
though  it  should  not  add  one  penny  to  his  income. 
For  such  a  man,  and  for  the  capitalist  no  less,  there 
are  other  compensations,  other  rewards,  the  satis- 
faction of  prosperous  enterprise,  the  sense  of  power, 
the  pride  in  a  task  efficiently  performed  and  in  its 
usefulness  to  man.  Enjoying  these  in  a  greater  degree 
perhaps  than  other  men,  it  is  little  enough  surely  to 
ask  of  the  capitalist  that  he  should  not  grudge  his 
employees  a  share  in  the  fruits  of  his  success  ;  and 
though  it  may  be  hard  enough  to  assess  the  relative 
values  of  manual  and  intellectual  labour  (for  it  is 
always  hard  to  compare  two  incommensurable  things) 
yet  it  is  surely  not  beyond  the  wit  of  reasonable  men 
to  come  to  an  agreement. 

There  remains  however  a  second  difficulty  to  be  met, 
and  herein  it  will  be  the  worker's  turn  to  make  some 
sacrifice.  Just  as  for  the  capitalist  there  can  be  no 
profits  without  risks,  so,  too,  the  workers  cannot  expect 
to  reap  the  benefits  of  success,  without  sharing  the  burden 
of  failure.  Common  justice  forbids  the  alternative  of  a 
one-sided  bargain.  It  cannot  be  "  heads  I  win  and 
tails  you  lose"  in  the  parnership  between  capital 
and  labour.     If  the  workers  share  the  profits,    they 


COMPROMISE  251 

must  share  in  the  losses  also.  And  here  it  is  that 
the  difficulty  arises,  for  it  is  abundantly  clear  that  to  the 
individual  worker,  with  his  too  slender  margin  of 
resources,  such  losses  may  mean  nothing  short  of 
complete  catastrophe. 

For  we  cannot  expect  the  artisan  out  of  his  two 
pound  wage  to  make  good  a  loss  which  might  cut 
down  his  weekly  income  to  a  pound.  If  the  mischances 
of  industry  are  to  be  met  even  in  a  small  degree  out  of 
his  pocket,  some  better  scheme  must  be  found.  Can  we 
in  other  words  advise  some  form  of  insurance  whereby 
to  distribute  and  diminish  the  incidence  of  losses  ? 
There  is,  as  it  so  happens,  a  convenient  precedent  to 
follow  ;  of  profit-sharing  schemes  the  most  satisfactory 
is  known  as  the  shop-piece-work  system.  The  principle 
of  this  i  s  simple  enough  ;  when  the  time  comes  to 
make  the  distribution  of  the  profits,  instead  of  assessing 
each  man's  share  in  proportion  to  his  individual 
out-put,  the  basis  of  division  is  reckoned  by  the  united 
out-put  of  the  shop.  By  this  arrangement  the  weaker 
members  suffer  no  handicap  ;  each  will  do  his  best  for 
the  good  of  all  ;  and  by  the  force  of  public  opinion  and 
the  sense  of  common  interest  a  high  level  of  industry 
will  be  maintained.  Now  if  this  scheme  were  further 
extended  to  include  not  merely  the  members  of  a  single 
shop,  but  a  group  of  factories  or  perhaps  even  an  entire 
trade,  it  is  easy  to  see  how  the  difficulty  of  losses  might 
be  solved.  For  being  thus  widely  spread,  the  losses, 
if  not  altogether  negligible,  would  not  at  any  rate  be 
crippling.  At  any  given  time  it  will  be  tolerably  certain 
that  while  one  particular  factory  may  suffer  failure, 
the  majority  would  succeed,  and  upon  the  whole 
reckoning  there  would  still  be  a  balance  of  profit  to 
distribute.  Whether  or  no  the  employers  also  would 
choose  to  pool  their  resources  in  a  similar  manner,  is  for 
themselves  to  decide  ;  but,  as  we  have  said  above  the 
natural  tendency  of  the  future  will  lie  towards  a  greater 


2  52  NEW  FALLACIES  OF  MIDAS 

concentration  and  co-ordination  of  industry.  The  firm 
with  a  milHon  pound  capital  will  probably  become 
more  common  ;  the  firm  with  a  hundred  thousand 
pounds  capital  more  rare.  And  in  the  main  this  change 
will  be  all  to  the  worker's  good.  Where  the  small 
capitalist  must  in  self-defence  be  niggardly  lEind  grasp- 
ing the  larger  firm  can  afford  to  be  generous.  The 
man  who  controls  many  factories  will  not  only  be  less 
eager  over  trifling  profits,  but  he  will  be  more  proof 
against  dangers  of  incidental  failure  ;  he  can  take  the 
ill  luck  with  the  good,  and  play  off  a  gain  here  against 
a  loss  elsewhere.  The  very  magnitude  of  his  resources 
will  give  stability  to  his  position,  as  well  as  open  up  fresh 
opportunities  of  organisation  and  scientific  enterprise. 
By  all  this  the  workers  will  also  benefit  ;  they  will  be 
less  likely  to  incur  any  overwhelming  losses  ;  and  no 
special  machinery  may  be  needed  to  protect  them 
against  such  accidents.  In  any  case,  however,  it  is 
clear  that  with  proper  adjustment  they  could  be 
made  capable  of  bearing  their  share  in  the  losses  as 
well  as  enjoying  their  share  uf  the  profits  ;  and  there 
seems  no  sufficient  reason,  either  on  this  score  or  on 
any  other,  to  reject  the  system  of  profit-sharing  as  a 
basis  of  industrial  compromise.  Nor  need  we  fear  the 
failure  of  a  system  which  thus  presses  the  principle  of 
partnership  to  its  logical  conclusion.  For  it  does  more 
than  call  a  truce  to  the  competition  between  capital 
and  labour  ;  by  uniting  them  as  it  must  not  only  in 
the  pursuit  of  a  common  interest,  but  also  by  the 
acceptance  of  a  mutual  sacrifice,  it  will  awaken  a  more 
generous  spirit  of  co-operation  and  so  lay  firmly  the 
strong  foundations  of  an  enduring  peace. 

That  this  arrangement  is  practicable,  we  need  not 
doubt.  But  the  last  word  has  not  yet  been  said. 
Such  a  compromise  cannot  be  regarded  as  a  final 
solution  of  the  problem  of  industry,  and  it  falls  short  of 
finality  for  the   very   simple  reason  that   sharing  in 


COMPROMISE  253 

industrial  profits  is  not  the  same  thing  as  sharing  in 
industrial  property.  Now  it  is  clear  that  either  we  have 
been  right  in  what  we  have  said  about  the  advantages 
of  owning  prop' rty,  or  we  have  been  wrong.  If  we 
are  right,  and  if  the  sense  of  ownership  is  a  real  stimulus 
to  effort,  enterprise  and  thrift,  then  we  cannot  in 
justice  deny  to  the  employed  what  we  have  commended 
in  the  case  of  the  employer.  We  cannot  be  contented 
with  half  measures  ;  and  once  we  are  prepared  to  per- 
petuate Capitalism,  there  can  be  no  stopping  short 
until  we  have  ensured  that  labour  should  become 
capitalist  too.  Happily,  there  is  no  great  obstacle 
to  such  a  development  ;  indeed  there  are  abundant 
signs  that  it  is  coming.  The  working  class  are  already 
investors  on  a  considerable  scale  ;  and  by  that  I  mean 
something  much  more  than  the  possession  of  a  trifling 
l)alance  at  the  Savings  Bank.  They  hold  shares  in 
every  sort  of  business,  and  derive  from  these  an  income 
which  in  19 10  was  estimated  at  thirty  milHons.  But 
perhaps  the  most  interesting  example  of  industry 
capitalised  in  no  small  degree  by  working  folk,  is  to  be 
found  in  the  Co-operative  Societies  of  consumers,  of 
which  we  spoke  above.  It  has  been  asserted,  though 
probably  with  some  exaggeration,  that  one-third  of  the 
country's  retail  business  is  already  in  the  hands  of  the 
co-operatives.  The  movement  has  clearly  a  great 
future  ;  it  is  sure  to  spread,  since  it  attracts  members 
by  the  double  inducement  of  low  prices  and  a  bonus 
divided  on  surplus  profits  ;  and,  though  the  range  of 
its  extension  is  obviously  limited  by  the  fact  that  the 
number  of  commodities  to  which  it  can  be  applied  is 
also  limited,  yet  it  will,  within  those  limits,  do  most 
valuable  service  by  encouraging  the  habits  of  economy 
and  investment.  At  any  rate  it  is  not  too  much  to  say 
that  thrift  is  gradually  becoming  popular  among  the 
masses  ;  and,  what  is  more  important,  it  is  becoming 
now  for  the  first  time  possible.      So  long  as  the  income 


254  NEW  FALLACIES  OF  MIDAS 

of  the  working  man  was  barely  sufficient  to  provide 
him  and  his  family  with  the  necessities  of  life,  it  was 
not  merely  difficult,  it  would  have  been  definitely 
wrong  for  him  to  save  ;  for  saving  would  Jiave  meant 
that  he  or  his  children  must  go  short  of  proper  nourish- 
ment and  comfort.  That  was  the  dilemma  with  which 
in  the  past  the  majority  of  the  working  class  was  faced. 
But  the  turning  point  has  come,  and  we  now  see  a 
clear  promise  of  better  things.  One  great  result  of  the 
war  will  be  to  establish  a  higher  standard  of  remunera- 
tion for  every  kind  of  labour.  On  this  Labour  will 
itself  insist  and  will  take  no  denial ;  even  if  bad  times 
or  trade  depression  follow  the  return  of  peace,  they 
will  not  in  the  long  run  be  sufficient  to  prevent  though 
they  may  postpone  the  change.  Whatever  economic 
difficulties  lie  immediately  ahead  of  us,  we  may  be 
confident  that  they  will  be  but  a  passing  phase,  and  that 
given  the  energy  and  the  will  to  overcome  them,  we 
shall  emerge  far  more  prosperous  and  far  more  secure 
of  progress  than  we  were  before.  The  last  three  years 
have  witnessed  a  far-reaching  revolution  in  the 
mechanical  methods  of  production,  which  is  perhaps 
without  a  parallel  in  history.  Improvements  and 
inventions  have  been  made  for  which  we  might  without 
the  'w  ar  have  waited  half  a  century.  And  if  we  turn  our 
opportunities  to  proper  use,  then  the  possibilities  of 
labour-saving  machinery,  scientific  management  and  the 
consequent  multiplication  of  industrial  out-put  are 
almost  unlimited.  As  a  consequence  the  nation's 
wealth  will  increase  by  leaps  and  bounds  ;  and  Labour's 
chance  will  have  arrived  ;  in  this  new  wealth  the 
workers  will  claim  a  share  and  they  will  get  it.  Nor 
is  there  any  reason  to  doubt  that  it  will  be  a  far  more 
generous  share  than  in  the  past.  This  (provided  the 
profits  of  industry  are  great  enough)  will  involve  no 
prejudice  to  the  just  claims  of  capital,  for  that  will 
receive  at  least  the  same  standard  of  remuneration  as 


COMPROMISE  ,  255 

before.  It  is  not  that  the  capitalists  will  receive  less, 
but  that  the  working  man  will  receive  more  ;  and 
when  that  happens,  he  will  be  under  the  necessity  no 
longer  of  consuming  all  that  he  earns.  He  will  be  able 
to  save  and  by  the  investment  of  his  savings  to  join 
the  ranks  of  the  capitalist  class. 

With  wages  sufficient  for  his  wants,  and  an  ample 
margin  for  investment,  it  might  well  be  thought  that 
the  working  man  would  have  attained  the  summit  of  his 
hopes.  Yet  even  so  there  is  one  last  step  to  be  taken 
before  the  old  reproach  of  wage-slavery  can  be  done 
finally  away.  When  we  claim  for  property  (as  we 
have  claimed  above)  that  it  brings  out  a  man's  best 
gifts,  stimulates  his  interests,  spurs  his  energies,  and 
teaches  him  the  lessons  of  independence  and  responsi- 
bility, it  is  not  so  much  of  the  mere  possession  of 
property  that  we  are  thinking  but  rather  of  the  active 
use  of  it.  Deep  down  in  every  human  being  there  is 
planted,  it  would  seem,  something  of  the  creative 
instinct  of  the  artist ;  and  we  take  an  artist's  pride  in 
all  effort  expended  upon  that  which  is  peculiarly  our 
own.  From  the  millionaire  who  watches  over  the 
business  it  has  taken  nim  a  life-time  to  build  up,  down 
to  the  peasant  proprietor  who  comes  as  it  were  to  know 
and  love  every  animal  and  plant  upon  his  farm,  it  is 
always  the  same  story.  It  may  be  that  man  is 
incorrigibly  selfish  ;  yet  we  must  take  him  as  we  find 
him.  It  is  a  law  of  his  nature  that  the  more  stake  he 
has  in  any  enterprise,  the  greater  will  be  the  zest  he 
will  threw  into  his  task,  and  the  greater  the  happiness 
that  it  will  bring  him.  If,  therefore,  we  accept  this 
law,  it  will  not  content  us  that  the  working  man 
should  invest  his  savings  somewhere.  He  must  be 
able  to  invest  them  in  the  firm  or  factory  where  his  own 
work  lies.  His  interest  in  the  prosperity  of  the  business 
must  be  no  longer  the  indirect  interest  of  a  servant,  it 
must  in  some  degree  be  the  direct  interest  of  a  pro- 


256  NEW  FALLACIES  OF  MIDAS 

prietor.  His  alliance  with  capital  which  begins  in 
co-operation,  must  end  in  a  genuine  partnership.  He 
must  become  in  a  real  sense  his  own  ^ployer.  Now 
to  such  a  course  the  way  does  not  at  first  sight  seem 
easy.  There  are,  it  is  true,  many  joint-stock  com- 
panies, the  shares  of  which  are  open  to  the  public 
purchase  ;  but  in  a  large  majority  of  manufacturing 
firms,  this  is  not  the  case  ;  the  financial  interests  are 
vested  either  with  a  single  family  or  with  a  close  ring 
of  private  partners.  To  expect  these  voluntarily  to 
forgo  so  valuable  a  prize  and  to  surrender  even  a 
proportion  of  the  shares  to  mere  employees  is  to  expect 
impossibilities ;  and  the  advent  of  co-partnership 
might  be  indefinitely  postponed,  were  it  not  for  one 
favouring  circumstance.  For  the  truth  is  that  the 
contribution  of  the  employees  will  be  needed.  As  time 
goes  on  industries  will  tend  (for  the  reasons  mentioned 
above)  to  be  organised  upon  a  larger  scale.  Firms 
which  have  done  business  on  a  capital  of  £100,000 
will  drop  out ;  and  their  place  will  be  taken  by  com- 
panies which  will  count  their  capital  by  millions,  and 
these  will  have  a  constant  tendency  to  expand.  There 
will  be  an  enormous  demand  for  fresh  money,  which 
the  existing  shareholders  will  be  quite  unable  to  meet  ; 
shares  will  then  be  offered  to  the  public  ;  and  for  the 
working  man  who  has  savings  to  dispose  of,  the  door 
will  then  stand  open.  Such  a  development  may  yet 
be  a  long  way  off,  but  that  it  is  possible  has  been  proved 
already  in  the  Cotton  Trade.  There  it  has  long  since 
been  the  fact  that  the  Loan  Capital  is  largely  subscribed 
by  the  mill-hands  themselves,  and  there  seems  no  valid 
reason  why  what  has  succeeded  in  one  trade  should  not 
be  extended  to  others.  Given  the  power  and  the 
opportunity  the  working  man  will  not  be  backward  to 
invest ;  and  sooner  or  later  the  day  may  yet  arrive 
when  he  will  have  a  considerable  part,  perhaps  even  a 
leading  part  in  the  capitalisation,  and    so  a    definite 


COMPROMISE  257 

share  in  the  organisation  also,  of  his  own  industry. 
What  a  reversal  of  present  day  conditions  this  would 
involve  it  is  not  difficult  to  see.  Picture  for  a  moment 
the  practical  changes  which  would  inevitably  follow. 
The  annual  meeting  between  the  Shareholders  and 
Directors  of  the  Company  would  no  longer  be  attended 
by  a  mere  sprinkling  of  haphazard  critics,  only  partially 
interested,  and  for  the  most  part  wholly  ignorant  of  the 
detailed  working  of  the  business.  In  their  place  would 
sit  an  eager  gathering  of  foremen  and  managers, 
operatives  and  clerks, — each  of  them  possessing  expert 
knowledge  about  the  details  of  his  own  department,  all 
of  them  equally  intent  to  criticise  mistakes,  to  air  their 
grievances,  suggest  new  policies,  and  promote  the 
common  welfare  of  the  whole  establishment.  The 
election  of  directors  would  now  have  become  a  reality  ; 
representatives  would  not  be  chosen  for  the  sake  of 
some  high-sounding  title  or  upon  a  hearsay  reputation 
for  sagacity.  The  coveted  honour  would  be  bestowed 
on  those  who  had  served  their  apprenticeship  under  the 
jealous  eye  of  their  fellow  workmen,  and  who  had  proved 
themselves  not  unworthy  of  the  trust.  For  chairman 
they  would  naturally  nominate  the  one  time  master  of 
the  business — the  capitalist  employer  ;  and  provided 
always  that  he  retained  the  confidence  and  goodwill 
of  his  new  colleagues,  he  would  continue  to  exercise  the 
influence  and  authority  to  which  his  large  stake  in  the 
concern  entitled  him.  If,  however,  through  negligence 
or  intractability  on  his  part  he  were  to  forfeit  that 
confidence  and  fail  to  secure  his  re-election  to  the 
Board,  his  position  would  be  wellnigh  intolerable. 
In  all  likelihood  he  would  be  driven  to  sell  his  share  of 
the  capital  ;  and  either  his  place  would  be  taken  by 
others  who  were  in  better  sympathy  with  the  policy  of 
the  shareholders,  or  else  the  shareholders  themselves 
would  combine  to  buy  him  out.  Such  an  occurrence 
would  no  doubt  be  rare  ;    the  shareholders  would  be 


258  NEW  FALLACIES   OF  MIDAS 

too  discreet  lightly  to  abuse  their  power;  they  would 
be  too  much  interested  in  the  prosperity  of  the  concern 
to  flout  the  man  whose  practical  abilities  have  been 
proved  by  his  success,  and  whose  interest  would  after 
all  be  identical  with  their  own.  Yet  the  fact  remains 
that  they  would  virtually  possess  the  power  to  retain 
or  to  discard  upon  a  vote  of  confidence  the  services  of 
the  very  man  who  in  former  days  would  have  stood 
to  them  as  master.  The  truth  is  that  economic 
evolution  would  but  have  followed  the  same  lines  that 
our  political  development  has  already  taken ;  and 
just  as  the  country  is  governed  no  longer  by  an  absolute 
monarch  owing  responsibility  to  no  man,  but  by  a 
minister  who  is  the  people's  servant  and  who  derives 
his  whole  authority  from .  the  support  of  popular 
opinion,  so  the  arbitrary  power  of  the  capitalist 
employer  would  have  disappeared ;  and  the  true 
industrial  sovereignty  would  rest  with  the  industrial 
constituents.  The  self-appointed  autocrat  would  have 
become  the  representative  governor.  Yet,  if  he  be 
wise  and  tactful,  the  capitalist  need  fear  no  loss  of 
power.  Government  by  consent  is  perhaps  the  most 
effective  form  of  government  that  can  exist ;  a  strong 
prime  minister  can  do  things,  and  work  changes  which 
no  tyrant  could  ever  have  attempted.  Seeing,  there- 
fore, what  advantages  his  financial  strength  and  ripe 
experience  would  afford  him,  it  would  be  a  fool  of  a 
capitalist  who  could  not  keep  his  hand  on  the  reins. 
He  will  exert  his  authority  however  not  so  much  because 
he  is  the  largest  individual  shareholder,  but  (what  is  far 
more)  because  he  is  the  most  valued  servant  of  the 
firm.  By  virtue  of  the  same  qualities  which  made  him 
master,  he  will  remain  master  still  ;  and,  although  his 
monopoly  of  capital  will  have  gone,  nis  monopoly  of 
knowledge  and  experience  will  remain.  For  the  power 
to  render  service  will  then  be  the  measure  of  a  man's 
importance.     When    all    are    capitalists,    the    natural 


COMPROMISE  259 

order  of  things  will  have  returned  ;  and  the  skill  of  the 
human  hand  or  human  brain  will  be  supreme.  Man 
the  producer  will  no  longer  bow  down  to  whoever 
owns  the  mechanical  agents  of  production,  craving  the 
use  of  them  and  selling  his  services  for  bread.  Rather, 
forasmuch  as  he  has  skill  to  use  them,  they  will  gladly 
be  offered  for  his  use,  just  as  money  w^hich  men  can- 
not themselves  turn  to  profit,  is  put  at  the  disposal 
of  a  bank  which  can.  Capital,  in  short,  will  no  longer 
hire  labour,  but  labour  {whether  of  hand  or  brain)  will 
hire  capital.     The  tables  will  have  been  turned. 

Thus,  after  all,  the  Syndicalist's  dream  will  have 
come  true,  though  not  in  the  way  he  had  expected. 
The  producer  will  indeed  have  come  by  his  own,  but  not 
by  the  forcible  expropriation  of  the  capitalist.  The 
Syndicalist  in  fact,  was  at  once  both  right  and  wrong. 
His  error,  like  the  Sociahst's,  springs  from  a  crude 
impatience  and  from  a  narrowness  of  vision.  Both  of 
them  see  things  with  the  partial  eye  of  the  theorist 
who  imagines  that  in  his  own  theory  the  whole  of  truth 
is  contained.  They  are  intolerant  of  rival  philosophies 
and  can  scarcely  be  persuaded  but  that  there  exists 
some  single  panacea  which  will  set  the  whole  world  to 
rights.  Yet  truth,  they  might  have  remembered, 
has  many  faces  ;  the  theories  of  Syndicalist,  Socialist 
and  Individualist  as  well,  are  complementary  and 
compatible  rather  than  contradictory  or  exclusive. 
For  each  has  seen  some  side  of  the  truth.  In  part  the 
Socialist  is  right  ;  for  there  are  indeed  many  functions 
of  production  which  are  best  to  be  managed  by  the 
State  ;  in  part  the  Syndicalist  is  right  ;  for  the  power 
to  produce  is  what  ultimately  counts.  In  part,  too, 
the  Individualist  is  right  ;  because  it  is  for  a  man 
himself  to  shape  his  own  character  and  destiny.  So  in 
the  evolution  of  the  perfect  Society,  each  of  these  three 
theories  will  play  its  separate  part,  and  each  contribute 
to    the    formation    of    a   concerted    whole.     By    what 


26o  NEW  FALLACIES  OF  MIDAS 

precise  steps  that  Society  will  b'^-  evolved,  time  alone 
will  show.  One  thing  is  certain.  Theories  will  not 
of  themselves  accomplish  it.  Changes  will  proceed 
from  the  slow  and  steady  pressure  of  our  economic 
needs,  rather  than  by  the  eager  anticipations  of 
reformers.  Long  before  the  very  idea  of  Socialism 
had  been  conceived  of,  it  was  the  people's  need,  and  not 
some  philosopher's  catch-word  that  gave  Athens  a 
State-theatre  ;  and  all  nations  must  be  obedient  to 
the  same  compelling  logic.  Among  ourselves  the 
natural  monopolies  will  one  by  one  be  nationalised,  as 
the  advantages  and  economies  of  State  control  come 
home  to  us.  So  again,  as  years  go  on,  the  better 
education  of  the  workers  will  fit  them  for  responsibility  ; 
increasing  prosperity  will  place  the  acquisition  of 
capital  within  their  grasp  ;  and  then.  Syndicalism  or 
no  Syndicalism,  they  will  inevitably  receive  a  share 
in  both.  And  meanwhile,  whatever  attacks,  in  Press 
or  Parliament  or  on  revolutionary  platforms,  may 
menace  the  capitalist's  position,  he  will  stand  secure 
against  them  all.  Even  if  he  is  temporarily  removed 
he  will  return.  The  Bolshevist  imagines  in  his  foolish 
heart  that  by  destroying  the  capitalist  in  Petrograd,  he 
will  have  struck  a  death  blow  at  capitalism  itself,  but 
before  the  year  is  out,  he  will  surely  find  himself  at  the 
mercy  of  a  capitalist  who  keeps  shop  in  Berlin  or 
New  York.  The  capitalist  cannot  be  ousted,  because 
he  is  indispensable.  He  is  the  embodiment  of  the  three 
most  vital  elements  of  economic  life,  brains,  enterprise, 
and  thrift,  and  to  deny  the  individual  the  free  use  and 
just  reward  of  these  is  to  strike  at  the  fundamental 
instincts  of  human  nature.  And  human  nature, 
despite  man's  own  efforts  to  defeat  it,  must  assert  itself 
and  in  the  end  prevail.  As  the  world  pursues  its 
course  onward  through  the  centuries,  there  will  doubt- 
less be  false  starts,  tragic  blunders,  and  fierce  reactions. 
It  will  pass  through  many  phases.     It  may  well  be 


COMPROMISE  261 

that  at  one  time  or  another  it  will  witness  the  Socialist 
State  or  the  Syndicalist  Society  in  being,  just  as  some 
would  say  that  we  have  already  had  the  Individualistic 
Society,  They  will  not  last.  For  txiese  are  able  to 
satisfy  but  one  side  of  human  nature  and  no  more  ; 
but  in  the  perfect  society,  if  man  has  patience  to 
await  its  coming,  every  side  of  his  nature  will  find  its 
adequate  fulfilment. 


(iii.) 

And  now,  perhaps  we  need  to  remind  ourselves 
that  we  are  living  in  the  present,  and  are  face  to  face 
with  the  problems  of  to-morrow. 

Prophecies  cannot  help  us  greatly  ;  and  though  we 
have  sketched  the  lines  of  the  ideal  compromise  it 
must  be  admitted  that  the  lines  are  vague.  Yet 
perhaps  it  is  better  so.  The  most  elaborate  and  clear- 
cut  of  political  codes  is  not  always  the  most  permanent 
or  the  most  effective  ;  rather  it  is  the  vague  elastic 
structure  of  the  English  constitution  which  commands 
the  admiration  of  the  world.  Strict  definition  of  powers 
and  functions  which  leaves  no  room  for  change  and 
growth  can  give  no  guarantee  of  permanence ;  for 
the  machinery  wnich  the  human  mind  creates  to-day, 
it  will  outgrow  to-morrow  ;  and  no  S3^stem  can  impose 
an  artificial  harmony  which  does  not  exist  in  the  pur- 
poses of  men.  So,  whatever  the  form  it  takes,  the 
compact  between  Capital  and  Labour  must  depend  in 
the  last  resort  upon  the  goodwill  and  good  sense  of  either 
party.  Both  must  be  prepared  to  bear  in  some  degree 
the  other's  burdens  ;  both  strive  to  comprehend  the 
other's  mind.  By  the  spirit  of  "  sweet  reasonableness  " 
and  self-restraint  without  which  our  political  system 
would  long  ago  have  resulted  in  chaos,  we  have  in  fact 
achieved  unity,  order  and  continuous  development. 
And  the  same  spirit  may  yet  in  the  future  serve  to 


262  NEW  FALLACIES  OF  MIDAS 

work  the  same  miracle  upon  the  warring  elements  of  the 
economic  world. 

One  word  should  perhaps  be  added  in  conclusion. 
Good  will,  as  I  have  implied,  is  not  of  itself  enough  ; 
good  sense  is  also  needed.  The  best  intentions  are  no 
substitute  for  brains  ;  and  business  must  still  be 
business,  not  philanthropy.  Nor  would  the  workers 
themselves  desire  to  have  it  otherwise  ;  they  ask  for 
justice,  confidence  and  consideration,  but  not  for 
sentimental  indulgence ;  and  the  ideal  employer , 
will  give  them  what  they  ask.  He  will  neither  pamper 
them  with  ill-timed  bounty  nor  harass  them  by  fussy 
interference.  Small  good  can  come  of  a  spurious 
paternalism  which  does  everything  for  the  workers 
that  they  ought  to  do  for  themselves.  It  is  idle  to 
furnish  them  with  swimming  baths  and  libraries, 
concert  halls  and  playing-fields  if  thereby  they  are 
robbed  of  those  opportunities  of  self-help  and  inde- 
pendence which  count  most  in  the  making  of  men. 
Nor  on  the  other  hand  will  the  ideal  employer  lose 
sight  of  his  wider  duties  towards  Society  at  large.  His 
is  indeed  no  narrow  responsibility.  The  influence  of 
his  actions  is  felt  far  beyond  the  circle  of  his  own  factory 
hands  and  the  results  of  his  policy  will  outlast  his 
life-time.  As  much  harm  may  be  done  by  running  his 
business  at  a  loss  for  charitable  ends  as  by  the  most 
shameless  profiteering.  Certainly  he  will  earn  no 
thanks  from  the  general  public,  if  he  overpays  his 
employees  at  their  expense  ;  and,  if  through  the 
expenditure  of  his  rightful  profits  in  gratuitous  gener- 
osity, he  fails  to  increase  his  capital,  improve  his  plant 
and  develop  nis  business  properly,  then  he  will  but 
impede  industrial  progress  by  a  mistaken  sense  of 
kindness.  In  short  he  must  take  wide  views,  consider- 
ing how  trade  will  be  affected  by  his  poHcy,  what  too 
will  be  its  influence  on  rival  firms,  and  what  on  the 
consumer  ;    and  while  promoting  the  welfare  of  the 


COMPROMISE  263 

individual  workers  he  will  not  forget  the  interest  of  the 
State  whose  members  they  also  are.  Between  these 
many  claims  and  couater  claims  the  choice  cannot  be 
simple  ;  to  reconcile  them  all  requires  a  difficult 
combination  cf  self-sacrifice  and  worldly  wisdom, 
uniting  as  it  were  the  prudence  of  the  serpent  with  the 
gentleness  of  the  dove.  So  before  the  patriot  employer 
there  lies  a  task  immensely  complex,  immensely 
arduous,  and  immensely  repaying  too.  Then  and 
then  only  will  he  have  succeeded  in  it,  when  all  these 
rival  claims  are  reconciled,  when,  each  in  his  allotted 
station,  every  single  man  whom  he  employs  is  enabled 
to  exercise  his  best  abilities  both  for  his  own  good  and 
for  the  good  of  all  the  others,  and  when,  finally,  each 
industry  is  so  organised  and  so  directed  as  best  to  serve, 
not  the  private  advantage  of  employer  or  employed, 
but  the  healthy  and  prosperous  development  of  the 
whole  Community. 

NOTE  ON  PROFIT  SHARING. 

During  the  last  hundred  years  many  schemes  of 
Profit-sharing  have  been  tried,  occasionally  with 
success,  but  more  frequently  the  reverse.  Some 
schemes  have  proved  in  practice  more  serviceable  than 
others,  and  though  there  is  no  wide  divergence  in  the 
principle  involved,  there  is  considerable  difference  in 
the  actual  machinery  employed.  In  some  cases  the 
workman  receives  an  extra  bonus  which  varies  accord- 
ing to  the  amount  of  the  out-put  or  the  market  price  of 
the  finished  product.  Thus  in  the  iron  industry,  a 
furnace  keeper  is  first  paid  his  normal  wage  and  then, 
over  and  above  that,  he  gets  an  additional  percentage 
according  to  the  price  of  pig-iron.  The  bonus  may 
be  apportioned  in  two  ways.  It  may  go  to  the  indi- 
vidual worker  in  proportion  to  the  quantity  or  speed  of 
his  individual  out-put  ;    or  it  may  be  divided  equally 

18 


264  NEW  FALLACIES  OF  MIDAS 

among  the  whole  body  of  workers,  according  to  the 
aggregate  out-put  of  the  shop.  The  latter  system  is 
known  as  shop-piece-work.  Another  device  aims  at 
taking  the  employees  into  partnership  and  giving  them 
a  real  stake  in  the  industry.  In  this  case  the  payment 
of  the  bonus  takes  the  form  of  allotting  the  employees 
shares  in  the  capital  of  the  firm.  On  paper,  each  of 
these  schemes  would  appear  both  reasonable  and 
generous,but  for  one  reason  or  another  they  have  nearly 
always  failed.  Out  of  300  profit-sharing  experim.ents, 
initiated  since  1829,  only  133  survived  in  1912.  This 
failure  is  due  in  most  cases  to  the  opposition  of  the 
Trades  Unions.  To  them  all  forms  of  Profit-sharing 
are  equally  odious  ;  and  when  in  1917  a  writer  to  the 
Times  discussed  the  conditions  of  industrial  settlement 
after  the  War,  he  declared  that  the  mere  suggestion  of 
such  an  arrangement  would  be  absolutely  fatal.  This 
opposition  of  the  Unions  is  broadly  speaking  due  to 
two  causes.  One  is,  more  or  less,  a  special  and  acci- 
dental cause,  being  bound  up  with  the  tactics  of  the 
Unions  in  the  organisation  of  their  forces.  The  other 
is|more  fundamental  and  challenges  the  whole  object 
and  principle'-of  Profit-sharing. 

The  first  and  special  cause  is  briefly  this.  As  we 
have  shown  the  success  of  any  Labour  combination 
chiefly  depends  upon  its  ability  to  present  a  united 
front  and  act  as  a  single  body.  Division  is  fatal ;  it 
will  never  do,  for  example,  if,  when  the  miners  of  one 
pit  are  dissatisfied  with  their  wages  and  decide  to  go 
on  strike,  their  fellow  unionists  in  the  next  county 
refuse  to  join  them  because  their  wage  is  satisfactory. 
It  is  an  axiom  of  Trades  Unionism  that  all  must  act 
together  and  the  strong  support  the  weak.  Now 
under  the  profit-sharing  system,  the  amount  of  the 
bonus  paid  to  the  workers  will  differ  from  mine  to 
mine,  and  from  factory  to  factory.  The  factory  which 
is  blessed  with  up-to-date  machinery  and  an  efficient 


COMPROMISE  265 

manager,  will  make  large  profits  and  the  workers  will 
benefit  accordingly.  A  second,  which  is  less  fortunate 
in  these  respects  will  be  less  profitable,  and  the 
workers  will  be  correspondingly  ill-paid  ;  but  when 
they  endeavour  to  obtain  redress  they  will  receive 
no  support  from  their  more  fortunate  comrades.  So 
there  is  a  fear  lest  the  solidarity  of  the  Union  be  thus 
impaired  ;  and  very  naturally  the  Union  leaders  have 
been  driven  by  this  fear  into  opposing  the  whole  policy 
of  profit-sharing  Yet  in  the  long  run,  such  an  objec- 
tion need  hardly  be  fatal  to  the  project.  For,  as  the 
Unions  win  for  themselves  a  more  assured  position, 
and  as  their  members  are  educated  more  and  more 
to  realise  the  supreme  importance  of  united  action,  the 
danger  will  disappear  ;  and  when  moreover  the  other 
ends  which  the  Unions  now  hold  in  view  are  success- 
fully attained,  they  need  no  longer  fight  so  shy  of  a 
certain  disparity  in  profits.  Perhaps  however  the 
surest  method  of  setting  such  fears  to  rest  would  lie  in 
an  extension  of  the  shop-piece-work  system.  If  the 
bonus  were  calculated  upon  the  aggregate  profits  of 
the  entire  trade,  there  would  no  longer  be  any  ground 
for  complaint.  The  members  of  the  less  prosperous 
factory  would  benefit  by  the  prosperity  of  others  ; 
and  yet  all  alike  would  feel  that  their  own  earnings 
w -re  dependent  in  some  degree  upon  their  own 
individual  efforts. 

So  much  for  the  first  objection  to  Profit-sharing  ; 
the  second  is  more  vital.  It  has  its  roots  in  the 
inveterate  suspicion  with  which  all  employers  are 
regarded.  For  the  workers  cannot  as  yet  be  brought 
to  believe  that  the  concession  is  ever  offered  from 
purely  selfless  motives.  "  Timeo  Danaos  et  dona 
ferentes  "  ;  such  generosity  doubtless  conceals  a  trap. 
Now  most  employers  would  not  deny  that  one  result 
of  profit-sharing  is  to  stimulate  production.  The  offer 
of  the  bonus  is  a  lure  like  the  carrot  hung  before  the 


266  NEW  FALLACIES  OF  MIDAS 

donkey's  nose  to  quicken  its  pace  ;  and  the  appeal  of  a 
higher  wage  is  so  strong  that  few  workers  can  resist  it. 
The  question  therefore  arises  whether  many  indi- 
viduals may  not  be  tempted  to  work  beyond  their 
srength.  High  wages  are  undoubtedly  capable  of 
arousing  men  and  women  to  unnatural  efforts.  It  has 
not  been  the  call  of  patriotism  alone  that  has  kept 
many  munition  workers  at  the  lathe  seven  days  in  the 
week  throughout  the  war  ;  such  excess  of  energy 
cannot  be  healthy,  and  there  is  a  real  danger  in  the 
speeding  up  of  production  which  is  always  the  result 
and  often  the  avowed  object  of  profit-sharing.  When 
Labour  leaders  and  others  are  endeavouring  to 
establish  a  universal  eight-hour  day,  it  is  fatal  to  offer 
high  rewards  to  individuals  for  working  ten  or  twelve. 
And,  besides  all  this,  it  is  only  fair  to  enquire 
how  far  the  employer  himself  expects  to  profit  by  this 
increase  of  activity.  If  for  instance  ten  per  cent,  is 
added  to  the  total  value  of  the  out-put,  by  what  right 
should  he  step  in  and  claim  one-half  of  the  addition  ? 
In  point  of  fact,  he  usually  claims  more  than  that  ; 
but  taking  his  share  at  its  lowest,  it  is  hard  to  see  how 
such  a  claim  can  be  supported.  There  is  therefore  some 
real  ground  for  the  working  man's  suspicion  that  one 
way  or  another  he  is  going  to  be  "  done."  It  is  well 
within  the  power  of  an  employer,  for  example,  to 
manipulate  the  stock-taking  and  by  keeping  prices  low 
to  cheat  Labour  of  its  true  deserts  ;  or  again  the 
apparent  generosity  of  the  bonus  may  often  enough 
work  to  Labour's  disadvantage  in  the  end.  For 
when  in  due  course,  the  price  of  living  goes  up,  and  a 
rise  in  wages  becomes  due,  the  master  can  point  to  the 
bonus  and  pretend  that  it  is  the  virtual  equivalent  ot 
a  rise  in  wages  ;  whereas  in  reality  it  is  nothing  but  a 
reward  for  extra  service.  These  and  many  others  are 
undeniable  flaws  in  the  profit-sharing  policy.  Partly 
they   arise  from  real   difficulties   of  organisation  and 


COMPROMISE  267 

control,  but  for  the  most  part  they  are  the  results  of 
the  long  standing  feud  between  Labour  and  Capital 
and  of  the  distrust  and  jealousy  which  that  feud  has 
bred.  The  iirst  step  towards  a  permanent  agreement 
is  to  dissipate  this  tainted  atmosphere  ;  and  that 
nothing  but  good-will  and  sincerity  can  possibly 
achieve.  The  second  step  will  be  to  discover  some 
working  principle  of  profit-sharing  which  w'ill  be  not 
only  just  but  agreeable  to  both  parties,  and  to  devise 
some  machinery  by  which  the  proportion  of  the  shares 
may  be  fixed  and  from  time  to  time  pass  under  revision. 


Chapter  XVIII 
THE  NEW  FALLACIES  OF  MIDAS 

(i.) 

Stevenson's  Fable  of  the  Four  Reformers  contains  a 
useful  caution  against  too  great  zeal  for  rapid  change. 
When  the  party  of  enthusiasts  foregathered,  each  came 
provided  with  a  favourite  panacea  of  his  own.  One 
wished  to  abolish  Property,  a  second  the  Bible,  a  third 
the  Laws.  But  the  fourth  was  for  no  such  half 
measures.  "  The  first  step,"  he  said,  "  is  to  abolish 
mankind."  And  in  that  paradox  Stevenson  touched  on 
the  heart  of  the  matter.  The  reformer  who  begins 
by  pinning  his  entire  faith  upon  institutions  will  end 
by  losing  his  very  faith  in  man.  For  it  is  not  by 
institutions  that  man  can  be  perfected.  Change,  if  it 
is  to  come  at  all,  must  be  change  of  our  own  selves  ; 
and  we  can  never  hope  to  be  truly  happy  till  we  have 
first  become  good  and  wise.  The  real  clue  therefore 
to  the  economic  problem,  as  to  most  of  the  problems 
under  the  sun,  is  not  to  be  sought  through  Parliaments, 
or  Guilds  or  Charters,  but  through  the  education  of 
the  human  race.  Education  can  set  the  world  to  rights, 
and  nothing  else  can  ;  but  it  must  be  education  in  no 
narrow  or  academic  sense  ;  it  must  embrace  all  man's 
faculties  and  train  all  his  powers  ;  firstly,  his  body, 
that  he  may  be  strong  to  labour  and  to  produce  wealth 
in  abundance  ;  secondly,  his  mind,  that  he  may  have 
skill  and  science  to  make  his  labour  yet  more  fruitful  ; 
last  and  best  of  all,  it  will  educate  his  heart,  both  that 
he  may  know  wherein  true  wealth  consists,  and  that 

268 


THE  NEW  FALLACIES  OF  MIDAS        269 

he  may  learn  to  use  rightly  the  power  over  his  fellows 
which  wealth  will  put  into  his  hands.  For  more  than 
all  else,  it  is  his  false  ideals  and  imperfect  sympathies 
that  are  the  real  enemies  of  his  peace  ;  and  not  until 
the  law  of  conscience  is  become  the  authentic  law  of 
the  land  will  his  troubles  pass  finally  away. 

Let  us  not  be  deceived.  It  is  no  mere  pedantry,  no 
fanciful  belief  in  the  value  of  book-learning  that  sees 
in  education  the  one  sure  panacea  for  the  world's 
ailments.  The  child  is  father  to  the  man  ;  and  those 
who  control  or  superintend  the  training  of  the  young, 
hold  in  their  hands  the  future  destiny  of  the  race. 
In  its  schools,  as  nowhere  else,  the  character  of  a  nation 
is  moulded  ;  and  it  is  by  tne  national  character  before 
all  that  the  great  movements  of  history  have  been  and 
always  must  be  determined.  Character  founds 
empires  or  loses  them  ;  prepares  revolutions  or  sub- 
mits to  tyranny  ;  and  (nowadays  at  any  rate)  decides 
the  issues  of  peace  and  war.  Such  things  do  not  happen 
at  haphazard.  The  nidden  springs  from  which  they 
take  their  rise  are  the  ideals  and  prejudices,  the  fears 
and  aspirations  deeply  rooted  in  the  national  conscious- 
ness. These  spread  and  propagate  \\ith  an  unseen 
growth  ;  but  in  no  soil  are  they  more  fruitfully 
implanted  than  in  the  adolescent  mind.  It  was  the 
professors  and  schoolmasters  of  Germany  who  sowed, 
while  Europe  slept,  the  tares  from  which  grew  War  ; 
and  if  the  influence  of  these  men,  when  directed  to  an 
evil  purpose,  was  fraught  with  consequences  so  terrible 
and  so  momentous,  what  might  it  not  equally  achieve, 
if  employed  for  the  salvation  rather  than  the  destruction 
of  mankind  ?  In  England,  public  education  is  but 
half  a  century  old  ;  and  already  we  can  mark  the 
profound  effect  which  it  has  had  upon  the  welfare  and 
prosperity  of  our  people.  It  has  reduced  drunkenness, 
diminished  crime,  and  raised  the  popular  standards  of 
decency  and  comfort.     We  can  trace  its  influence  in  the 


270  NEW  FALLACIES  OF  MIDAS 

demand  for  better  housing  and  in  the  greater  attention 
paid  by  parents  to  the  rearing  of  their  children.  That 
it  has  awakened  a  real  thirst  for  knowledge  is  proved 
by  the  vast  output  of  cheap  literature,  wnich  has  given 
us  reprints  of  the  Classics  at  the  price  of  sixpence,  and 
popular  handbooks  on  almost  every  topic  of  Science, 
Politics,  and  History.  In  the  economic  sphere,  the 
results  of  education  are  perhaps  the  most  remarkable 
of  all.  The  habit  of  life  insurance  has  grown  enor- 
mously among  the  people.  The  figures  speak  for 
themselves.  In  1880  the  premiums  paid  annually 
amounted  to  thirteen  million  pounds  ;  by  19 17  that 
sum  had  been  multiplied  fourfold.  The  quickening 
intelligence  of  the  working  classes  has  led  to  a  clearer 
conception  of  industrial  problems,  a  stronger  deter- 
mination for  united  action,  and  also  a  higher  sense  of 
their  own  responsibilities.  Not  least,  it  has  increased 
the  national  efficiency.  It  has  given  to  millions  the 
training  and  intelligence  which  the  manipulation  of 
intricate  machines  and  processes  demands  ;  and  every 
year  our  methods  of  technical  instruction  are  improving. 
The  soil  is  now  prepared  ;  we  have  orly  to  give  the 
people  the  opportunities  they  need  and  soon  their  full 
powers  of  intelligence  and  imagination  might  be 
brought  to  bear  upon  the  task  which  lies  before  them. 
Almost  within  our  grasp  lies  even  now  such  wealth 
and  prosperity  as  was  beyond  the  wildest  dreams  of 
our  great-grandfathers  ;  and  were  our  own  eyes  fully 
opened  to  the  possibilities  of  our  future  progress,  they 
woula  be  dazzled  by  its  splendour.  Only,  between  us 
and  the  land  of  promise,  there  still  stands,  blocking 
the  path,  a  mountain,  as  it  were,  of  human  folly. 
Intelligence  and  imagination  can  remove  that  mountain 
and  nothing  else  can.  We  need  them  to  overcome  old 
prejudices  and  false  traditions,  to  abandon  our  obsolete 
ana  wasteful  methods  of  production,  and  to  inaugurate 
a  second  and  still  more   marvellous  industrial  revolu- 


THE  NEW  FALLACIES  OF  MIDAS        271 

tion  ;  we  need  them  to  establish  harmony  between  the 
■  classes,  to  make  a  full  end  of  the  foolish  and  enfeebling 
antagonisms  of  the  past,  and  to  unite  the  energies  of 
all  in  the  achievement  of  a  common  purpose.  We  need 
them  lastly  that  we  may  lay  wisely  the  foundations  of 
our  future  progress,  whether  by  an  even-handed  dis- 
tribution of  industrial  profits  and  economic  power, 
or  by  a  wise  expenditure  of  public  money  upon  the 
health  of  the  people,  and  upon  the  very  education 
which  will  give  us  the  qualities  of  character  we  need. 
For  the  lessons  we  must  learn  (let  us  repeat)  though  not 
to  be  learnt  fully  indeed  in  the  short  years  and  limited 
experience  of  school  life,  are  there  at  least  first  to  be 
impressed  upon  the  future  citizens  of  the  State  ; 
and  it  is  these  early  impressions,  received  at  the  most 
impressionable  age,  which  count  the  most.  For  this 
reason  we  must  see  to  it  that  the  sudden  enthusiasm 
for  education  to  which  the  war  has  lately  roused  us, 
is  not  thrown  away  or  misdirected.  The  call  for  a 
more  widespread,  more  prolonged  and  more  effective 
education  is  genuine  and  urgent  ;  but  it  is  to  be  inter- 
preted in  the  widest  and  most  liberal  sense.  It  must 
not  merely  be  a  call  for  better  technical  instruction, 
which  will  enable  us  to  hold  our  own  with  foreign 
nations  in  the  race  for  prosperity  or  power  ;  equally, 
and  indeed  far  more  do  we  require  an  education  which 
will  impart  a  saner  and  truer  outlook  upon  life,  which 
will  give  us  the  wisdom  and  the  will  to  solve  the 
thousand  problems  now  confronting  us  at  home,  and 
which  by  upholding  new  ideals  of  discipline  and  duty 
will  achieve  here  in  England  victories  even  more 
honourable  and  more  permanant  than  the  conquests 
of  trade  or  war. 

To  some  thinkers  it  has  seemed  that  the  Industrial 
Revolution  was  a  mistake,  a  false  step  in  the  world's 
history.  In  their  eyes  the  curse  of  machinery  out- 
weights  its  blessings  ;    the  ugliness  and  artiliciality  of 


272  NEW  FALLACIES  OF  MIDAS 

modern  life  disgusts  them  ;  and  so  in  their  search  after 
the  secret  of  what  human  society  should  be  they  would 
turn  back  to  those  free  agricultural  peoples,  on  whom 
the  curse  has  never  fallen.  In  the  life  of  the  yeoman 
farmer  or  peasant  proprietor  they  see  the  nearest 
possible  approach  to  the  ideal  life  ;  nor  can  we  deny 
that  there  is  something  of  the  ideal  in  the  life  which 
such  men  lead.  Owning  their  property  and  working 
for  themselves,  they  find  in  their  task  a  happiness  and 
satisfaction  not  known  to  those  who  work  for  hire. 
Their  character,  for  the  same  cause,  develops  a 
sturdy  independence  ;  they  are  no  respecters  of 
persons  ;  they  recognise  no  differences  of  class  ;  they 
scorn  the  servile  impotence  which  would  relinquish 
to  others  the  entire  control  of  public  government. 
Theirs,  too,  is  a  life  more  natural  to  our  kind  than  the 
life  of  the  towndweller  ;  their  days  are  spent  in  the 
healthy  air  ;  their  minds  are  attuned  to  tne  beauties 
and  mysteries  of  nature  ;  and  from  their  varied  task 
calling  as  it  does  for  a  constant  exercise  of  wits  and 
skill,  they  gain  a  snrewd  knowledge  of  both  things  and 
men.  Seldom  indeed  perhaps  never,  has  this  ideal 
picture  been  fully  reahsed  in  fact.='=  For  all  that,  we 
have  no  right  to  question  that  such  a  society  might 
have  been  evolved,  may  even  now  in  some  countries 
be  in  course  of  evolution.  But  for  ourselves,  when  we 
accepted  the  alternative  of  an  industrial  growth, 
that  ideal  v;as  put  once  and  for  all  behind  us  ;  we  can 
no  more  retrace  our  steps  or  win  back  our  old  simplicity 
of  life,  than  Adam  and  Eve  could  recover  their  inno- 
cence, when  once  they  had  tasted  of  the  tree.     And, 

*  The  ancient  civilisations  of  Greece  and  Rome  perhaps  came  very 
near  to  it  ;  but  then  they  were  built  up  upon  a  foundation  of  slave 
labour.  Chaucer's  England  gives  us  another  glimpse  of  its  possibilities 
but  even  there  the  back  of  feudalism  was  as  yet  scarcely  broken 
Perhaps  the  peasant  proprietors  of  modern  France  have  the  best  claim 
to  have  reaUsed  the  ideal.  Certainly  they  are  happy  and  intelligent 
industrious  and  contented  ;  which  is  more  than  can  be  said  of  most 
nations. 


THE  NEW  FALLACIES  OF  MIDAS         273 

like  the  apple  of  that  tree.  Industrialism  has  indeed 
brought  with  it  an  attendant  curse.  We  cannot  be 
blind  to  the  blemishes  of  modern  life,  the  injury  to 
health,  the  degradation  of  character,  the  restless  habits 
and  unwholesome  morality  of  our  great  towns,  ^^'orse 
even  than  these  have  been  the  pernicious  by-products 
of  the  industrial  system,  the  tyranny  of  masters,  the 
servile  condition  of  the  masses,  the  accumulation  of 
property  in  the  hands  of  the  very  few.  It  is  as  though 
man  having  created  for  his  use  a  vast  and  powerful 
engine,  had  suddenly  been  caught  into  its  coils,  trans- 
formed as  it  were  into  a  part  of  its  mechanism,  and 
constrained  to  slave  like  a  turn-spit  dog,  to  keep  the 
monster  in  perpetual  motion.  So  immense  and  com- 
plex has  the  organisation  of  modern  industry  become 
tnat  it  seems  to  overwhelm  and  crush  out  the  indivi- 
duality of  men  ;  for  employer  and  employed  alike 
business  has  been  stripped  of  its  human  element  ; 
both  are  equally  the  slaves  of  a  soulless  system  which 
they  must  obey  or  perish.  We  have  lost  the  old  com- 
pleteness, tlie  poise,  the  self-sufftciency  of  life  which  the 
agricultural  society  at  least  possessed  ;  and  we  have 
paia  the  price  of  material  prosperity  in  forfeiting  our 
peace.  Yet  there  is  no  reason  to  despair  :  the  step 
which  we  have  taken  has  brought  difficulties  and 
dangers  obvious  enough  ;  but  they  should  not  obscure 
the  potentialities  which  lie  behind.  The  Agricultural 
Societv,  we  should  remember,  is  of  its  very  nature 
static  ;  it  has  no  future  and  what  it  is  to-day,  it  will 
be  to-morrow  ;  and  a  century  hence  it  will  be  still  the 
same.  The  Industrial  Society  on  the  other  hand  has 
opened  out  new  and  inexhaustible  fields  for  human 
activity.  Consider  (to  name  but  one  or  two)  how,  by 
means  of  the  railway  and  the  postal  services  it  has 
multiplied  the  opportunities  of  education,  social 
intercourse,  and  travel,  how  by  the  improvement  of 
the   printing  press  it  has  brought   the  study  of  art. 


274  NEW  FALLACIES  OF  MIDAS 

literature  and  science  within  the  reach  of  all,  and  (more 
important  still)  how  by  the  reduction  of  working  horns, 
it  will  soon  have  furnished  all  with  the  leisure  to  enjoy 
and  profit  by  them.  What  further  possibilities  of 
social,  political  and  intellectual  life  the  future  holds 
in  store,  we  cannot  tell  ;  but  of  this  we  may  be  certain, 
that  under  the  sifting  test  of  time  the  chaff  of  Indus- 
trialism will  be  shed  away,  and  the  good  seed  remain. 
Man  will  not  remain  at  the  mercy  of  the  system  of  which 
he  is  himself  the  author  ;  but  his  emancipation  must 
come  by  pressing  forward,  not  by  hesitation  and  regrets. 
Only  further  education  can  complete  what  education 
has  begun.  For  the  self-same  faculties  which  caused 
thefatal  webtobe  woven,  will  prove  also  the  clue  to  his 
release,  and  the  mature  developments  of  science  and 
invention  will  correct  the  imperfections  of  their 
infancy.  The  dangers  of  a  little  knowledge  are  pro- 
verbial ;  but  the  proper  antidote  is  more  knowledge 
and  not  less.  So  for  us  there  can  be  no  drawing  back. 
If  our  organisation  is  at  fault,  we  must  better  our 
organisation,  not  destroy  it.  If  the  individual's  share 
therein  affords  him  too  small  a  measure  of  responsi- 
bility and  freedom,  we  must  train  him  to  deserve  a 
larger.  And,  as  the  State's  organisation  and  the 
individual's  efficiency  advance  from  strength  to 
strength,  each  will  react  upon  the  other,  the  State 
working  more  smoothly  because  it  is  better  served,  the 
individual  gaining  greater  freedom  because  he  has 
found  the  part  to  play  which  fits  him  best.  And 
meanwhile  as  men's  interests  and  sympathies  meet 
upon  new  points  and  unite  in  the  common  exercise  of 
new  activities,  not  only  will  the  bonds  which  bind 
Society  together  become  stronger,  more  intimate,  and 
better  understood,  but  for  each  member  also  there  will  be 
ampler  means  of  self-expression  and  a  freer  scope  in  the 
choice  of  them.  The  State,  in  other  words,  will  be 
more  a  State,  the  individual  will  be  more  an  individua 


THE  NEW  FALLACIES  OF  MIDAS        275 

than  ever  was  either  before.  The  Industrial  order  of 
Society  is  no  mistaken  or  chance  development  ;  it  is 
a  necessary  stage  in  the  ascent  of  man.  Just  as  the 
advance  from  animal  to  human  life  involves  deeper 
sorrows  and  more  searching  pains,  as  well  as  finer 
pleasures  and  nobler  tastes,  so  it  must  be  also  in  the 
advance  from  the  simpler  forms  of  civilisation  to  the 
more  complex.  Life  for  the  people  of  the  old  order 
was  doubtless  happy  ;  but  it  was  limited,  partly  by 
its  inevitable  isolation,  partly  by  its  preoccupation 
with  the  struggle  for  daily  bread.  The  society  of  the 
future  will  be  more  vital,  more  nervous,  more  given  to 
introspection,  experiencing  emotions  more  subtle  and 
more  intense.  Will  it  be  happier  ?  We  cannot  say  ; 
for  its  pleasures  will  be  of  another  quality  and  its 
happiness  will  stand  upon  a  different  plane.  Is  this 
then  progress  ?  We  call  it  so  ;  but  all  we  know  is 
that  the  impulse  of  our  nature  compels  us  to  move 
onward,  always  adding  to  our  knowledge,  always 
widening  our  experiences.  And  once  we  have  tasted 
the  sweets  of  fuller  knowledge  and  once  the  horizon  of 
our  experience  is  enlarged,  then  to  return  to  the  old 
ways  of  comfortable  ignorance  is  no  more  possible  for 
us  than  for  man  to  become  a  brute  again,  or  for  Adam 
and  Eve  to  recapture  the  first  innocency  of  Eden.  * 

(ii.) 

But,  though  with  the  dawn  of  clearer  knowledge, 
wider  sympathies,  and  fuller  powers  all  the  malign 
influences  of  economic  life  will  disappear  like  evil 
spirits  at  rising  of  the  day,  yet  after  all  the  rest  are 
vanished,  one  obstinate  spectre  still  remains  behind. 
Wherever    business    is    transacted    by    bargain    and 

*  The  source  of  future  development  has  been  well  summarised  by  a 
sentence  in  .Mr.  Ashbec's  book  "  Where  the  Great  City  Stands."  "  .\s 
Hellenic  civilisation  made  the  gentleman  with  the  aid  of  the  slave,  so  we 
may  make  the  gentleman  with  the  aid  of  the  machine." 


276  NEW  FALLACIES  OF  MIDAS  ; 

exchange,  there  competition  will  also  be  ;     and  never 
so  long  as  buyers  buy  or  sellers  sell,  can  the    law    of 
supply  and   demand   be   driven    altogether    from    the 
market  place  :    least  of  all  will  it  be  absent  from  the 
Industrial  State,  where  each   individual  citizen  so  far 
from  being  self-sufficing,  is  infinitely  dependent  upon 
the  activities  of  others.     Values  will  still  vary  ;    rare 
gifts,  rare  services,  rare  strength  still  command  high 
prices  because  the  need  for  them  is  urgent  ;    common 
gifts    and    common    services     command    low    prices, 
because  the  supply  of  them  is  easy.     Nature's  Law 
is  stronger  than  education,  stronger  even  than  Demo- 
cracy, and  neither  of  these  can  avail  to  make  all  men 
equal,  simply  because  nature  has  not  made  them  so. 
The  most  that  they  can  offer  (and  in  truth   it  is   little 
enough)  will  be  a  fair  field  for  competition,  an  equal 
opportunity  for  all.     Competition  itself  and  all  that 
competition  involves,  not  even  the  strictest  Socialism 
can  quite  eliminate.     However  free  may  be  the  passage 
up  the  ladder  of  advancement,  and  however  surely  the 
best  and  ablest  may  rise  towards  the  top,  it  is  certain 
that  a  large  proportion  must  stay  very  near  the  bottom. 
You  may  democratise  the  House  of  Lords,  throw  even 
the  diplomatic  service  open   to    merit  ;    but  you  can 
never   make   every    man   an   ambassador   or   a    peer. 
Somebody,  in  fact,  must  be  satisfied  with  the  meaner 
and  humbler  walks  of  life.     There  will  still  be  coal  to 
raise,  furnaces  to  stoke,  goods  to  carry,  bricks  to  lay, 
and  so  millions  of  men  and  women  must  continue,  as  it 
seems,  to  grind  out  their  souls  or  exhaust  their  bodies 
upon  the  deadening  monotony  of  such  menial  labour. 
You    may    shorten    hours,     enliven    work,      improve 
conditions  ;    but  the  uncomfortable  fact  remains  that 
to  spend  the  best  part  of  the  day  upon  an  exacting 
routine  of  physical  labour  is  not  the  ideal  of  what  life 
should  be.     It  may  be  true  enough  that  many  artisans 
lead  happy  lives,  love  their  work,  and  possess  varied 


THE  NEW  FALLACIES  OF  MIDAS         277 

interests  and  cultivated  tastes  ;  yet  no  sensible  father 
who  was  free  to  name  a  profession  for  his  son  would 
choose  that  he  should  spend  his  days  in  heaving  coals 
from  grimy  sacks  into  suburban  cellars  or  oiling  the 
works  of  a  throbbing  thundering  machine.  Worse 
still,  as  though  it  were  not  enough  that  such  tasks 
should  be  dull  and  disagreeable,  nature  has  contrived 
that  for  the  most  part  they  should  also  be  ill- paid  ; 
so  that  those  men  who  more  than  any  seem  to  need  the 
compensations  of  a  comfortable  home  and  cultured 
leisure,  are  in  fact  the  least  able  to  afford  them.  For 
such  as  these  there  is  but  cold  comfort  in  the  promise  of 
democracy,  if  it  means  no  more  than  one  out  of  every 
hundred  shall  win  his  way  to  better  things.  The  door 
may  indeed  stand  open  for  all  comers,  but  what  of  that 
if  only  those  can  gain  admission  who  have  the  strength 
or  skill  to  force  a  passage  through  the  crowd  ;  and 
what  will  it  profit  them  that  the  backstair  entrances 
of  birth  and  privilege  shall  have  been  closed,  if  for 
the  vast  majority  there  still  remains  the  disappoint- 
ment of  failure  and  exclusion.  Dives  may  be  ousted 
from  his  heritage  of  luxury  ;  and  Lazarus  be  promoted 
in  his  place  ;  but  Lazarus'  brother  beggars  who  must 
lie  still  outside  the  door,  have  no  special  cause  to  bless 
the  chance  which  has  been  offered  them  only  to  be  lost. 
When  we  remember  how  unequal  arc  the  endowments 
and  advantages  with  which  men  enter  upon  life,  and 
how  large  a  number  are  handicapped  or  frustrated  in 
the  struggle  by  weak  health  or  lack  of  recognition  or  a 
thousand  other  checks  of  unfriendly  fortune,  we  must 
admit  that  equality  of  opportunity  can  never  of  itself 
establish  Paradise  on  earth,  and  that  though  its  prizes 
should  be  drawn  without  favour  or  regard,  life  must 
still  on  these  conditions  remain  a  lottery  to  the  end. 

So  it  has  seemed  to  some  philosophers  that  for 
man,  as  for  the  rest  of  the  animal  world,  life  must  of 
its  very  nature  be  always  a  struggle  and  a  conllict, 


278  NEW  FALLACIES  OF  MIDAS 

seeing  that  in  the  modern  city,  no  less  than  in  the 
primeval  forest,  it  is  the  fittest  and  strongest  and  most 
capable  which  survive  and  flourish  ;  while  the  weak 
go  to  the  wall.  These  thinkers  have  declared  the  law 
of  natural  selection  to  be  the  only  source  of  all  human 
progress  ;  for  them  the  hope  of  the  future  lies  in  the 
triumph  of  the  strong.  But  while  the  disciples  of 
Nietsche  applaud  and  welcome  the  advent  of  the 
super-man  without  thought  or  pity  for  the  victims  of 
his  supremacy,  the  conscience  of  mankind  has  never 
wholly  corsented  to  this  inhuman  doctrine,  and  as 
civilisation  has  advanced,  it  has  striven  more  and  more 
to  combat  the  working  of  these  natural  laws  and  to 
place  itself,  as  it  were,  above  them.  At  all  times  the 
weak  have  been  able  to  rely  to  some  extent  upon  the 
charity  of  individuals,  but  with  the  gradual  awakening 
of  the  social  conscience,  organised  justice  has  begun 
to  take  the  place  of  haphazard  philanthropy,  and  public 
legislation,  dealing  with  whole  classes  rather  than  with 
isolated  cases,  is  busied  in  helping  those  who  cannot 
help  themselves.  The  poor,  the  sick,  the  unfortunate, 
are  in  part  at  least  supported  out  of  the  pockets  of  the 
rich  ;  even  the  idle  ne'er-do-well  receives  his  share  of 
bounty,  and  in  a  hundred  ways  we  endeavour  to  redress 
the  unequal  dispensations  of  Providence  by  artificial 
means.  But  though  much  has  indeed  been  done,  yet 
much  remains  to  do.  The  idealist  at  least  can  never 
be  satisfied  this  side  of  Utopia,  and  we  must  needs  look 
forward  (how  far  into  the  future  none  can  say),  to  the 
perfect  society  in  which  man's  victory  over  nature  will 
be  final  and  complete.  There  the  individual  will  not 
merely  be  indemnified  against  the  grosser  injustices  of 
fortune  ;  his  right  to  share  with  others  in  the  good 
things  of  life  will  be  permanently  and  incontestably 
assured.  All  can  not  perhaps  be  equally  happy,  but 
there  will  be  an  equal  opportunity  of  happiness  for 
all.     Now  though  circumstances  alone  cannot    bring 


THE  NEW  FALLACIES  OF  MIDAS  279 

happiness,  yet  happiness  is  for  most  of  us  very  depen- 
dent upon  the  outward  circumstances  of  life.  Except 
for  a  Diogenes  or  a  Francis,  a  decent  standard  of 
material  comfort  is  the  first  condition  of  contentment. 
But  to  be  well  fed  and  well  clothed  is  not  enough  ;  a 
man's  soul  may  be  starved  while  his  body  prospers,  and 
for  the  fullest  and  highest  development  of  his  powers 
and  personality  (which  alone  is  the  secret  of  true 
happiness)  he  will  also  require  some  possession  of 
material  wealth.  Does  his  taste  incline  to  intellectual 
pleasures,  he  will  need  books  ;  or  to  aesthetic,  he  will 
need  pictures  or  music.  If  he  lacks  the  means,  he 
cannot  travel  nor  pursue  a  favourite  hobby  ;  he  cannot 
enjoy  to  the  full  the  society  of  friends  without  the 
resources  of  hospitalit}^  nor  the  companionship  of  the 
family  without  the  proper  conveniences  of  home. 
These  are  some  of  the  avenues  and  means  to  a  full  self- 
realisation  ;  in  which  if  we  would  be  fair  to  others  and 
honest  with  ourselves,  we  can  allow  of  no  monopoly  ; 
and  in  the  ideal  society  at  least  the  right  of  them  can 
hardly  be  denied  to  any  human  being.  It  used  once 
to  be  the  fashion  to  pretend  that  the  poor  are  happier 
as  they  are,  that  education  would  be  wasted  on  them, 
and  that  the  pleasures  of  intellect  and  art  and  beauty 
can  have  no  place  whatever  in  their  lives.  To-day  such 
foolish  platitudes  are  out  of  date  ;  and  anyone  who 
has  had  e.\perience  of  the  working  classes  (especially 
perhaps  of  the  working  classes  of  our  northern  towns) 
knows  them  to  be  false.  If  the  rich  man's  son  is 
happier  and  better  and  more  useful  for  the  wider 
outlook  and  more  liberal  tastes  which  his  wealth  and 
education  give  him,  the  poor  man's  son  may  be  so  too  ; 
and  in  the  future,  whatever  may  be  the  character  of 
our  Utopia,  this  one  thing  at  least  must  be  secured 
for  each  and  all  without  distinction,  an  equal  oppor- 
tunity with  others  for  getting  from  life  the  best  that 
life     can    give     them.     No     system    will    satisfy    an 

10 


28o  NEW  FALLACIES  OF  MIDAS 

enlightened  and  Christian  democracy  which  does  not 
make  it  ultimately  possible  for  every  child  born  into  the 
world  to  realise  his  best  and  highest  self.  Life  then 
in  the  ideal  Society,  will  offer  much  more  to  a  man 
than  the  precarious  hope  of  drawing  a  winning  ticket 
in  the  lottery  of  fate.  His  right  to  happiness  will  not 
depend  on  his  own  ability  to  fight  his  way  to  the  fore  ; 
rather  will  it  be  the  inalienable  privilege  of  his  man- 
hood, permanent  and  secure  to  him  whatever  his  rank 
or  his  work  or  his  capacity.  No  man  can  do  better 
than  his  best  ;  and  provided  that  according  to  his 
powers  he  serves  the  community  faithfully  and  woll, 
every  labourer  will  be  worthy  of  his  hire  ;  to  the 
chimney  sweep  sweeping  his  chimneys,  or  to  the  road- 
mender  mending  his  roads,  no  less  than  to  the  merchant 
in  his  counting  house  or  the  judge  upon  his  bench,  there 
will  be  an  opportunity  of  enjoying  whatever  may  make 
life  for  him  a  life  indeed  worth  living. 

But  it  will  be  long  years  yet  before  the  Golden  Age 
of  fable  can  come  back  again  to  earth  ;  and  such  a 
state  of  society  as  we  have  pictured  is  not  to  be  estab- 
lished in  a  day.  The  zeal  of  the  Socialist  who  would  set 
up   the  Commune,   and  enforce  equality  by  law,*  is 

♦  Much  has  happened  since  these  lines  were  written  ;  and  the 
equahtarian  state  can  now  no  longer  be  considered  as  a  mere  castle  in 
the  air.  War,  the  great  leveller,  has  given  us  a  foretaste  of  its  appli- 
cation ;  and  what  once  seemed  the  fantastic  dream  of  communists, 
has  been  translated  by  the  Food  Controller  into  concrete  fact.  For 
the  first  time  perhaps  in  history  rich  and  poor  have  stood  on  an  equal 
footing  as  concerns  the  chief  necessities  of  life.  Tea  and  sugar,  meat 
and  margarine  have  been  distributed  without  regard  for  wealth,  quality, 
or  condition.  The  experiment  has  of  course  been  Umited  and  incom- 
plete :  it  has  touched  but  one  side  of  economic  Ufe  :  nevertheless 
it  has  done  much  more  than  simply  to  tide  over  an  awkward  situation. 
It  has  established  a  precedent.  What  legislation  can  achieve  in  war, 
it  can  also  maintain  in  peace  :  and  who  shall  say  whether  the  masses, 
having  once  tasted  the  benefits  of  an  enforced  equality,  will  lightly  forgo 
the  opportunity  of  its  perpetuation  ?  Such  a  course  appears  in  the  last 
degree  unlikely  :  for  it  is  out  of  keeping  with  the  English  character  : 
but  now  at  least  if  never  before,  it  has  become  practical  politics.  The 
reproach  of  Communism  has  been  done  away,  and  it  demands  even  if  it 
does  not  deserve  our  serious  consideration. 


THE  NEW  FALLACIES  OF  MIDAS        281 

dangerously  misplaced,  and  however  much  we  may 
sympathise  in  his  aspiration  for  the  end,  we  cannot  but 
condemn  the  means.  For  the  remedy  of  Communism 
must  be  ineffectual,  simply  because  it  is  too  complete. 
It  cuts  the  knot  of  the  problem,  it  is  true,  in  the  simplest 
possible  fashioij,  rectifying  inequality  by  destroying 
competition,  defeating  Nature  by  defying  her.  But 
it  is  not  so  that  Nature  can  be  treated  with  impunitj^ 
We  may  submit  to  her  as  our  mistress,  or  tame  her  as 
our  slave,  but  we  cannot  banish  her  altogether  from 
the  world.  To  accomplish  man's  perfection,  we  must 
first  accept  him  as  he  is,  recognise  his  temptations  and 
his  weaknesses,  and  meanwhile  remember  that  the 
same  impulse  which  drives  him  to  the  Devil,  may 
equally  prove  the  salvation  of  his  soul.  Virtue  and 
vice  are  only  opposites  in  so  far  as  they  are  the  right 
use  and  the  wrong  use  of  the  same  thing.  To  convert 
man's  weakness  into  strength,  to  guide  his  natural 
impulses  from  wrong  channels  into  right,  that  is  the 
true  task  of  the  reformer  ;  but  to  ignore  altogether 
the  existence  of  those  impulses,  is  no  less  dangerous 
than  it  is  absurd  ;  as  well  might  the  man  who  designs 
an  aeroplane  omit  the  law  of  gravity  from  his  calcu- 
lations. This,  then,  is  the  Communist's  (and  in  a  lesser 
degree  the  Socialist's)  mistake,  that  he  undertakes  to 
alter  human  nature  by  the  simple  but  foolish  process 
of  pretending  that  it  is  other  than  it  is.  In  the  attempt 
to  make  the  individual  happy  he  would  end  by  making 
him  something  which  was  not  an  individual  at  all. 
For  the  essence  of  individuality  lies  in  a  man's  right 
to  realise  his  self  in  his  owa  way.  A  man  must  be  his 
own  keeper  before  he  is  his  brother  s,  and  his  ideals  are 
for  himself  alone  to  form.  Now  tastes  differ  ;  one 
man's  meat  is  another  man's  poison  ;  Mary  listens 
while  Martha  serves.  There  are,  broadly  speaking, 
two  types  of  men  in  the  world  ;  one  wliicli  is  ambitious 
for  material  wealth  and  will  work  night  and  day  to  get 


282  NEW  FALLACIES  OF  MIDAS 

it,  another  which  has  no  such  ambition,  but  prefers 
moderate  wealth  combined  with  leisure  to  the  alter- 
native, of  luxury  and  toil.  Both  are  legitimate  ideals, 
but  Communism  demanding  equality  of  rewards  and 
equality  of  service,  could  tolerate  neither;  the  man  of 
the  first  type  must  devote  the  hardwon  profits  of  his 
industry  to  the  common  stock,  and  himself  gain  no 
direct  advantage  ;  the  second  must  sacrifice  his  love 
of  leisure  ;  and  bear  his  full  part  in  the  burden  of  pro- 
duction. In  short,  the  ideal  of  complete  equality  could 
only  be  practicable  in  a  community  of  saints  or  slaves. 
The  fundamental  instinct  of  the  normal  human  being 
rebels  against  such  a  system.  For  him  the  end  and 
purpose  of  all  effort  is  the  satisfaction  of  desires  ;  and 
while  he  does  not  expect  to  receive  where  he  does  not 
give,  neither  is  he  inclined  to  render  services  without 
the  expectation  of  rewards,  and  rewards  too  that  are 
proportionate  to  the  service.  Communism  is  against 
the  grain  of  our  nature  ;  we  do  not  wish  to  have  all 
things  in  common  with  our  neighbours,  not  because  we 
grudge  them  a  share  in  what  is  ours,  but  because  we 
want  it  to  be  ours  before  it  becomes  theirs  ;  so  any 
attempt  to  standardise  mankind,  to  support  one  class 
by  the  exertions  of  another,  to  penalise  the  efficiency 
of  Peter  in  order  to  indemnify  the  inefficiency  of  Paul, 
is  bound  ultimately  to  fail.  For,  as  in  medicine  cures 
can  only  be  effected  through  obedience  to  physical 
laws  and  it  is  a  dangerous  experiment  to  treat  a  diseased 
limb  by  draining  the  vitality  of  the  other  members, 
so  in  economics  health  is  to  be  sought  not  by  working 
against  nature,  but  by  working  with  her.  She  is  a  good 
ally,  but  a  bad  enemy  ;  for  she  never  fails  to  conquer 
in  the  end.  Competition  is  her  own  method  of  selec- 
tion ;  and  no  other  can  permanently  take  its  place. 
Ana,  if  we  believe  that  Nature  knows  best  how  to  fit  the 
individual  to  his  proper  function,  we  must  also  trust  her 
power  to  make  that  function  worthy  of  his  humanity. 


THE  NEW  FALLACIES  OF  MIDAS        283 

(iii.) 

Though  man  audaciously  proposes,  man  does  not 
himself  dispose.  Philosopl  ers  may  philosophise, 
reformers  may  preach  reform,  aiid  legislators  pass  their 
laws  ;  but  it  is  not  from  these  that  great  changes  take 
their  origixi  ;  it  is  from  the  deep  elemental  forces,  often 
incalculable,  and  for  the  most  part  incontrollable, 
which  drive  us  onward  along  the  road  of  destiny. 
The  reformers  themselves  are  after  all  but  the  mouth- 
piece through  which  is  expressed  the  deep  and  inarti- 
culate impulse  of  the  race.  The  laws  are  nothing 
more  than  the  visible  embodiment  of  a  popular  instinct 
or  the  outward  acknowledgment  of  some  pressing  need. 
It  was  the  Renaissance  and  not  Luther  that  made  the 
Protestant  religion  ;  England  passed  the  Reform  Bill 
and  not  the  House  of  Commons;  or  again,  if  we  ask 
what  has  been  the  chief  cause  of  the  growth  of  tem- 
perance in  modern  England,  it  is  not  the  propaganda 
of  teetotalers,  but  the  general  spread  of  education  which 
has  introduced  new  pleasures  and  fresh  interests  to 
counteract  the  lure  of  drink.  So,  if  we  try  to  forecast 
the  economic  future  and  to  discern  by  what  process 
a  remedy  may  be  found  for  the  unequal  distribution  of 
the  world's  wealth,  we  shall  seek  it,  not  so  much  among 
the  Statute  books  of  posterity,  or  in  the  progress  of 
Socialistic  legislation,  but  rather  in  the  natural  develop- 
ment of  economic  forces.  About  that  development 
there  can,  it  is  true,  be  no  certainty  at  all  :  what 
external  influences  may  intervene  to  change  the  course 
of  history,  we  cannot  tell  ;  it  may  be  that  out  of  the 
ruin  and  havoc  of  the  European  war  there  will  arise 
such  stern  necessity  for  co-operative  effort  as  will  force 
some  kind  of  Socialism  upon  us.  But  if  the  more 
natural  j;rocess  of  selective  competition  still  continues 
to  hold  the  field  (and  as  we  have  seen,  competition 
cannot    be    wholly    eliminated    without    an     almost 


284  NEW  FALLACIES  OF  MIDAS 

intolerable  suppression  of  the  individual's  will),  then 
it  is  not  contrary  to  reason  that  we  should  look  to  these 
natural  laws  for  ultimate  salvation,  and  it  may  even  be 
that  the  same  conditions  which  in  the  past  have  caused 
such  inequalities  of  distribution,  such  wide  divergencies 
of  poverty  and  wealth,  will  in  the  future  tend  to  produce 
the  very  opposite  result. 

All  such  prophecy  is  admittedly  guess-work  ;  but 
if  the  guess  is  worth  the  making,  the  manner  of  the 
change  will  be  briefly  this.  If  one  thing  is  certain  in 
the  future,  it  is  that  with  the  advance  of  science, 
industrial  efficiency  will  very  rapidly  improve,  and  as 
processes  become  more  elaborate,  it  is  clear  that  a 
larger  and  larger  proportion  of  the  world's  production 
will  be  effected  by  machines.  As  the  call  for  skilled 
mechanics  or  semi-skilled  machine-minders  increases, 
the  call  will  easily  be  met  by  a  corresponding  increase 
of  educational  facilities.  Already  we  have  discovered 
(especially  during  the  course  of  the  war  itself)  that  it 
now  needs  no  extraordinary  or  superior  intelligence 
to  handle  a  lathe  or  even  to  operate  an  intricate 
machine.  Women  with  a  bare  six  month's  experience 
have  undertaken  functions  which  hitherto  have  been 
jealously  regarded  as  the  prerogative  of  the  highly 
skilled  workman.  So,  long  before  the  progress  of 
scientific  production  has  reached  its  full  development, 
it  will  be  found  that  the  large  mass  of  unskilled  workers 
now  employed  upon  purely  manual  labour,  will  have 
been  absorbed  into  the  ranks  of  the  skilled  or  semi- 
skilled. Now,  when  that  has  happened,  there  \\ill  none 
the  less  remain  some  tasks  whicn  still  require  nothing 
but  brute  strength  or  mere  application  without 
intelligence.  But  when  the  nation  is  mainly  com- 
posed of  educated  men  and  women,  when  the  wastrel 
has  almost  disappeared  and  even  inefficiencv  is  rare, 
there  will  be  little  competition  for  such  jobs.  The 
time  may  come  when  it  is  more  difficult  to  find  a  man 


THE  NEW  FALLACIES  OF  MIDAS        285 

to  sweep  a  crossing  or  clean  out  a  drain  than  to  mind 
a  spinner  or  a  printing  press.  In  fact  the  casual 
labourer  will  be  as  scarce  as  he  now  is  common.  And 
when  that  time  is  reached,  the  inevitable  result  will 
follow.  The  action  of  economic  law  is  not  to  be  denied. 
As  the  supply  of  skilled  workmen  becomes  abundant, 
exceeding  the  demand,  the  reward  of  skilled  labour 
will  diminish,  while  on  the  other  hand,  the  reward  of 
the  unskilled  labourer  who  is  hard  to  come  by,  will 
correspondingly  increase.  And  just  because  skilled 
labour  (involving  as  it  does  a  higher  exercise  of  human 
faculties)  is  more  interesting,  more  dignified  and  for 
the  most  part  more  pleasant  than  unskilled  labour, 
it  will  lemain  more  popular  even  when  it  is  less  highly 
paid.  Already  we  can  see  to-day  how  many  men 
prefer  the  meagre  salary  of  the  clerk  or  the  elementary 
school  teacher  to  the  comparative  opulence  of  a  pit 
hand  or  a  mechanical  eni,nneer  ;  and  if  the  "  black- 
coated  "  professions  continue  to  attract  men  in  spite 
of  their  financial  disadvantages,  we  may  be  sure  that 
the  same  will  hold  true  of  skilled  as  against  unskilled 
labour.  Even  in  professions  of  a  higher  rank,  a  similar 
result  will  follow.  When  there  are  as  many  men 
competent  to  fill  the  manager's  chair  as  there  now  are 
to  sweep  out  his  office,  it  is  pretty  certain  that  the  post 
will  be  less  remunerative  than  it  now  is.  In  short, 
there  will  be  established  a  kind  of  equipoise  between 
the  various  grades  of  labour  ;  there  will  be  a  more 
general  diffusion  of  prosperity  and  the  reward  of  differ- 
ent services  will  in  some  measure  be  equalised  f©r  the 
simple  reason  (and  it  is  the  only  sound  reason  for 
equality)  that  the  demand  and  supply  of  those  services 
will  be  equal  too. 

Thus  the  whole  scale  of  values,  as  we  know  tlicm, 
will  have  undergone  a  revolutionary  change  ;  and  yet 
in  the  new  scale  there  will  be  no  injustice.  The  material 
reward  of  the  more  intelligent  and  energetic  will  it  is 


286  NEW  FALLACIES  OF  MIDAS 

true  be  less  ;  but  their  real  reward  will  lie  in  the  superior 
character  of  their  activities.  For  the  man  whose  work 
is  interesting  and  pleasant,  his  work  will  be  its  own 
reward  ;  nor  will  he  grudge  the  man  whose  work  is 
unpleasant  and  monotonous  the  merited  compensation 
of  a  higher  wage,  and  a  fuller  enjoyment  of  the 
material  benefits  of  life.  And  so  with  this  revolution 
in  money  values  there  will  come  a  transformation  of 
ideals  too.  Men  will  begin  to  value  their  work  and  their 
profession  for  its  own  sake  rather  than  for  its  financial 
rewards.  Instead  of  seeking  the  most  profitable  job, 
they  will  prefer  that  which  best  suits  their  ability  and 
tastes.  Competition  will  no  longer  be  a  senseless 
struggle  after  material  wealth,  and  a  vain  pursuit  of 
imaginary  advantages,  which  in  the  toil  and  hurry  of 
getting  we  have  scarcely  the  zest  or  leisure  to  enjoy. 
It  will  rather  be  a  sane  and  healthy  rivalry  for  the 
enjoyment  of  those  callings  and  activities  which  can 
best  enable  men  to  realise  their  highest  faculties  and 
fullest  powers.  And  in  the  day  when  that  transforma- 
tion is  accomplished,  we  shall  not  be  far  distant  from 
the  Kingdom  of  Utopia. 

The  truth  is  that  with  the  hey-day  of  a  new-found 
prosperity  our  sense  of  proportion  has  been  blurred  ; 
and  in  the  warped  vision  of  the  modern  world  the  old 
fallacy  of  Midas  is  re-enacted.  Blinded  by  the  false 
glitter  of  our  own  good  fortune  we  have  forgotten  that 
material  wealth  (like  Midas'  gold)  is  not  an  end  to  be 
pursued  for  its  own  sake,  but  a  means  to  an  end  beyond 
itself.  That  end  is  the  development  of  human  person- 
ality. Riches  have  indeed  their  value  ;  for  they  form 
the  very  basis  of  civilised  existence  ;  but  it  is  a 
secondary  value.  If  we  put  them  in  the  forefront  of 
ambition,  we  are  mistaking  the  purpose  for  which 
life  was  given  us.  Stevenson  once  said,  that  to  be 
wholly  devoted  to  some  intellectual  exercise,  is  to 
have    succeeded    in    life.       That    is    a    partial     and 


THE  NEW  FALLACIES    OF  MIDAS        287 

exaggerated  summary  of  life's  purpose  ;  but  at  least 
it  sets  a  right  emphasis  where  emphasis  is  due.  True 
success  is  not  to  be  measured  by  what  a  man  is  worth 
according  to  the  financier's  reckoning,  nor  even  by 
what  he  has  achieved  (though  that  is  a  worthier 
standard),  but  simply  by  what  he  is.  Material 
possessions  or  practical  activities  are  nothing  except 
as  they  contribute  to  the  building  of  a  man's  character 
and  as  they  serve  to  promote  his  genuine  happiness  and 
welfare.  True  wealth  in  short  does  not  lie  within  the 
narrow  limits  of  material  satisfactions  ;  it  is  the  sum 
total  of  life's  opportunities,  not  those  opportunities 
alone  which  can  be  bought  with  money,  but  also  those 
which  his  work  and  his  leisure  bring  him.  He  is  rich 
or  poor  according  as  these  are  great  or  small.  He 
succeeds  or  fails  according  as  he  uses  them  well  or 
uses  them  badly  for  the  fullest  realisation  of  the  best 
that  he  can  be.  Man  can  no  more  satisfy  the  cravings 
of  his  spirit  by  the  increased  output  of  factories  or  the 
scientific  exploitation  of  the  world's  resources  than 
Midas  could  satisfy  his  bodily  hunger  upon  gold. 

That  is  one  lesson  that  we  may  learn  from  the  old 
fable  ;  and  there  is  another; — that  just  as  for  Midas 
there  was  no  short  cut  to  fortune  through  the  freak  of 
a  fairy-tale  wish,  so  we  must  expect  no  miracle  of 
reform  or  legislation  to  end  all  our  troubles  in  a  night 
time.  Before  the  world  can  shake  free  from  the 
entanglements  of  circumstance  into  which  its  own 
misguided  policies  have  brought  it,  the  ancient  truth 
which  Midas  had  forgotten  must  be  understood  anew. 
For  we  too  are  in  danger  of  forgetting  that,  while  man 
may  make  nature  serve  him,  he  must  still  in  a  sense 
remain  her  slave.  Effort  is  the  only  road  to  success 
which  she  will  recognise.  Struggle  is  the  stern  necessity 
which  she  has  laid  upon  man  ;  and  man  must  bow 
to  her  decree.  So  long  as  individuals  preserve  their 
individuality  at  all,  it  is  inevitable  that  there  should  be 


288  NEW  FALLACIES  OF  MIDAS 

rivalry  between  them.  Destroy  competition  and  the 
salt  is  taken  out  of  life  ;  impose  an  artificial  equality 
upon  a  people  and  the  mainspring  of  their  progress 
will  be  gone.  Rivalry  there  must  be  both  now  and 
always.  But  let  it  be  rivalry  for  noble  ends  ;  not  a 
blind  conflict  for  a  barren  supremacy  of  gain  ;  let  each 
expect  his  recompense  no  less  from  his  work  than  from 
his  wage  ;  let  him  honour  the  privilege  of  service  noless 
than  he  prizes  the  material  benefits  of  success  ;  and 
then  as  the  race  rises  to  the  fulness  of  its  powers,  we 
may  have  good  hope  that  nature's  own  method  of 
competitive  selection  will  turn  to  man's  advantage, 
and  that  for  the  weakling  and  the  dunce  no  less  than 
for  the  strong  and  clever  there  may  yet  be  found  the 
opportunity  of  a  worthy  life  and  a  full  and  generous 
share  in  life's  good  things. 

For  to  believe  in  man's  future  is  to  have  faith  also 
in  something  greater  and  stronger  than  man.     If  he  is 
indeed  something  better  than  a  pawn  in  the  hands  of 
Fate,  and  if  his  life  is  something  more  than  a  gamble 
with  blind  chance,  then  we  must  believe  that  the  Power 
which  does  not  overlook  the  falling  of  a  sparrow,  will 
surely    take    thought    also   for    the    happiness    of    the 
individual   no  less  than  for  the  progress  of  the  race. 
Nature  may  seem  often  cruel  and  callous,  exulting  in 
the   war   between   her   creatures   and   careless   of   the 
single  life.     But  if  we  believe  at  all  in  the  essential 
goodness  of  the  divine  purpose,  we  must  needs  believe 
also  that  men  are  meant  to  be  happy  in  this  world,  and 
that  out  of  the  clash  and  contraiety  of  human  interests 
some  means  of  reconciliation  can  be  found.     When  we 
feel  that  amid  all  our  perplexities  and  troubles  we  are 
moving  to  the  consummation  of  a  perfect  plan,  it  is 
something   more   than   the   pious   fancy   of   orthodox 
religion  that  is  the  earnest  of  our  faith.     In  the  laws 
of  our  own  nature  we  discern  the  hand  of  God.     In  the 
observance   of  those  laws  we  know  that  all   human 


THE  NEW  FALLACIES  OF  MIDAS         289 

happiness  consists  ;  obeying  them  we  reap  the  fruits 
of  harmony  and  health  ;  disobeying  we  fall  into  strife, 
suffering  and  decay.  And  because  in  these  laws  is 
contained  some  promise  of  an  ultimate  perfection,  to 
discover  and  to  observe  them  is  the  whole  duty  of  man. 
Only  when  the  call  of  whatever  is  highest  and  noblest 
in  our  being  has  been  heard  and  answered  will 
Society  enter  at  last  upon  that  peace  in  which  the 
diversity  of  its  members  shall  be  blended  in  a  perfect 
unity,  and  the  power  to  lead  a  worthy,  full  and  happ3' 
life  shall  be  the  universal  birthright  of  mankind. 


INDEX 


Activity,  a  form  of  work,  21. 
Adventure,  spirit  of  financial, 226. 
Advertisement,   wasteful   use   of, 

52. 

Agriculture,  185,  241. 

Agricultural     civilisation     com- 
pared with  industrial,  272. 

American  methods  of  production 
and  management,  54,  sqq. 

Appetites,  insatiability  of  human, 

36. 
Apprentices,  statute  of,  133. 
Aristocracy,  power  of,  184. 
Aristotle,  15. 
Armaments,  wasteful,  49. 
Ashbee,  275. 

Askw'ith,  Sir  George,  138. 
Athens,    lack    of    drainage,    39. 

view  of  labour,  15,  206. 

State  theatre,  260. 
Australia,  industrial  arbitration, 
147. 

Bargaining,     between     rich     and 
poor,    106. 

liberty  of,  214. 

temptations  of,  51. 
Belgium,  population  of,  34. 
Belloc,  Hilaire,  186,  sqq. 
Beneiit  funds,  136. 
Bethlehem  steel  works,  56. 
Black  death,  108. 
Bolshevist,  260. 
Bounties,  state,  126,  240. 
Boy  Scouts,  23. 
Briand,  167. 
Bright,  John,  117. 
Bureaucracy,  67,  168. 
Burns,  John,  135,  150,  184. 
Business  methods,  see  Commerce. 
Business  firms,  increasing  size  of, 

245- 


Capital,    definition    of,    27. 

examples  of,  24. 

monopoly  and  competition   in, 
105. 

self-productive,  105. 

uses  differ  in  value,  30. 

to  be  shared  by  workers,  254. 

to  be  hired  by  Labour,  259. 
Capitalist,  advantage  over  work- 
men, 106. 

lack  of  sympathy  with  workers, 
III. 

natural  function,  243. 

place  in  future,  257. 

power  of,  104  sqq. 

value  of,  224. 
Ca'  canny,  1.15. 
Cain,  Tubal,  17. 
Caxton,  19. 
Character,  importance  of 

national,  269. 
Charity,  187. 
Chartists,  159. 
Chesterton,  211. 
Chinese  mandarin,  13. 
Christian  ethics,   119,   130,   166. 
Cobden,  117. 
Coles,  G.  D.,  202. 
Collectivism,  150,  217. 

represents  coi;sumers'  mterest, 
161. 
Combination  laws,  133. 
Combination     equivalent     to 

monopoly,  92. 
Commerce,  molality  of,  88,  122. 
Commission,  Royal,  135. 
Communism,  75,  157,  165. 

unnatural,  280. 
Competition     compared     with 
monopoly,  91. 

inevitable,  276. 

nature's  method,   282. 


290 


INDEX 


291 


remedy  for  stagnation,  228. 

Ruskin's;  views  of,  120. 
Complexity  of  modem  life,  21. 
Compromise  in  industry',  234. 
Conciliafon    between    Labour 

and  Capital.  146. 
Conditions  in  workshop,  147. 
Confiscation  proposed  by 

Socialists,  162. 
Conscription,  Industrial   215. 
Consumer    protected    under    coj- 
lectivism,  161. 

and  producer,  47. 
Consumption  and  investment,  25. 

and  production,  127. 
Co-operation,  76. 

the  spirit  of  the  age,  115. 

the  ke\Tiote  of  Socialism,  166. 
Co-operative     Society     of     Con- 
sumers, 173. 

membership  of,  174. 

wholesale  enterp'-ise,  175. 

productive  enterprise,  175. 
Co-partnership,  249. 
Corn  production  in  England,   34. 
Corn  Laws.    116. 
Cotton  trade,  245,  256. 
Cur-,tom,  its  influence  on  bargain- 
ing, 86. 

Demand  and  supply,  83,  ,123. 
Desires,   progressive  increase  or, 

36. 
Discipline  of  workshop,  246. 
Di\'isicn  of  labour,  18. 
Drink  index  of  wealth,  1 17,  283. 

Earth,  source  of  all  wealth,  10. 
Education,  67,  268,  271. 
Educational   Association,   Work- 
ers', 73. 
Efficiency,  172. 
Employees:,  see  Labour. 

under    Co-operative    Societies, 

179. 
Employers,  see  Capitalist. 
Employers'    Liability    Act,    137, 

189. 
Engineers,  147. 
Equalitarian  state,  280. 
Equality  of  opportunity   276. 


Ethics  of  commerce,  129. 
Exchange  inevitable  to-day,  87. 
Exprojiriation,  162. 

Fabian  Society,  160,  178. 
Family,  213. 
Feudalism  of  land,  95. 

of  industry,  149. 
Food  control,  280. 
Fourier,  157. 
Freedom,  66,  210. 
Free  trade,  114,  242. 
French  character,  197. 

labour  movement,  198. 

syndicalism,  152. 

Gas,  162. 

George,  Henry,  100,  159. 

George,  Lloyd,  42,  171. 

Germans,  65,  172,  269. 

German  kartels,  140. 

Gold  not  in  itself  wealth,  8,  81. 

fluctuations  in  value,  81. 
Greeks  valued  simplicity,  69. 

view  of  work,  15,  206. 
Guilds,  mediaeval,  99,  104. 
Guild  Socialism,  209  sqq. 

Handicrafts,  70. 
Hardie,  Keir,  150. 
Hood,  Thomas,  71. 
Houses,  224. 
Hyndman,  160. 

Income,  average  of  national,  233. 
probable    increase,    233,    252, 
256,  270. 
Independent  Labour  Party,  160. 
Individual  and  State,  274. 
Individualism,     114,      see     Man- 
chester school, 
justification  of,  237. 
services  of,  221. 
theories  of,  259. 
Industrial  Revolution,  133,  271. 
drives  populations  into  towns, 

96. 
effect  on  capitalist,  113. 
effect  on  poor,  106. 
effect  on  wages,  109. 
Industrial    state   compared    with 
agricultural,  272. 


292 


INDEX 


Insurance  Act,  137,  171. 
Insurance,  Life,  270. 
International     Working     Men's 

Association,  159. 
Investment,  105. 

and  consumption,  25. 

by  workers,  255. 
Ireland,  free  land  in,  99. 
Iron  industry,  263. 
Isolation,  effects  in  middle    ages, 
93- 

Jingoism,  208. 
Johnson,  Doctor,  55. 

Kartels  in  Germany,  140. 

Labour,  see  Work. 

Labour  and  Capital  see  Capital. 

Labour,  ill-paid,  128. 

exploited,  148,  204. 

to  hire  capital,  259. 

unorganised,  194. 
Labour  party,  136,  160. 

and  Co-operatives,  176. 
Labour  Party,  Independent,  160. 
Labour  colony,  189. 
Land,  monopolies  of,  95. 

in  Colonies,  96,  loi. 

in  Ireland,  99. 
Landowners,  dispossession  of,  163. 
Law  against  combinations,    133. 

Agricultural,  123. 

Corn,  116. 
Legislation,  class,  189. 
Leicester   stocking  makers,    117. 
Leisure,  22,  72. 
Liberty,  171,  210. 

to  bargain,  214. 

to  save,  216. 

Lock-out,  139,  239. 

Losses  to  be  shared  by  workers, 

254- 
Luxury,  39. 

defence  of,  40. 

arguments  against,  42. 

Macdonald,  Ramsay,  160. 
Manchester  school,  113,  207,   217. 

not  opposed,  116. 
Machinery,     William     Morris 
condemns,  70. 


Machine-minding,  71,  284. 

Majority,  rights  of,  209. 

Mallock,  233. 

Malthus,  33. 

Man,  primitive,  16. 

Management,  scientific,  55. 

Manager  in  business,  244. 

Mann,  Tom,  135,  150. 

Marx,  158. 

Mercantile     marine,     215,     238, 

239- 
Milk,  242. 

Mill,  John  Stuart,  iii. 
Milton,  124. 
Mines,  238,  239. 
Minimum  wage,  125,  143. 
Ministry  of  Agriculture,  185. 

of  Munitions,  144. 
Money  absent  in  Utopia,  75. 

measure  of  value,  81. 

necessary,  87. 
Money,  Sir  Leo  Chiozza,  241. 
Monopoly,  91  sqq. 

limits  of,  94. 

of  capitalist,  148. 

of  combined  strikes,  132. 
Monopolies,  natural,  228,  238. 
Morality   in   commerce,    88,    122, 

129. 
More,  Sir  Thomas,  59,  60. 
Morris,  William,  60,  160. 
Miinsterberg,  57. 

Natonalisation        of       railways, 

mines,  etc.,  151. 
Nationality,  spirit  of,  77. 

despised   by  Syndicalists,    152. 
Natural  monopolies,  228,  238. 
Nature,   her  part  in  production, 
II. 

rejects  communism,  280. 
Necessities  and  luxuries,  39. 
Non-Unionists,  141  sqq. 
Norwich,  150. 

Officialdom,  168. 
Opportunity,  equality  of,  276. 
Organisation  of  labour,  18. 

of  Masters,  140. 

of  Trade  Unions,  see  Unions. 


INDEX 


293 


Overtime,  143. 
Owen,  Robert,  159. 

Pensions,  Old  Age,  137. 

Pericles,  69. 

Philanthropy   and   business,  262. 

Picketing,  peaceful,  141. 

Piece-work,  shop,  251,  264. 

Plato,  40,  59. 

Political    economy    criticised    by 

Ruskin,  119. 
Political  development,    economic 

analog^,'  with,  258. 
Poor,  conflict  with  Capital,  106. 
Population,  increase  of,  34. 

shifts  to  towns,  96. 
Post  Office,  162,  167,  238. 
Prices,  fair,  87,  128. 
Primitive  man,  16. 
Production  and  consumption,  127, 
129. 

means  of,  103,  149. 

sources  of,  10,  103,  149. 
Production,  industrial, 

future  increase  probable,   254. 

maintained  by  women,  20. 

speeding  up  of,  266. 
Profits,  industrial,  248. 
Profit-sharing,  249,  263. 
Property     a     stimulus     to     indi- 
viduals, 169,  255. 
Protective  tariffs,  126. 
Railways,  effects  of  first,  116. 

nationalisation    of,    151,    169. 

strike,  245. 

waste  on,  54. 
Redistribution    of    wealth,    219, 

233- 
Rents  in  towns,  97. 
Retail  trade,  54,  55. 
Revolution,  French,  157. 

Industrial,  see  Industrial  Revo- 
lution. 

Russian,  154. 
Ricardo,  98. 

Rochdale  Q)-operators,  174. 
Roscbery,  Lord,  178. 
Ruskin,  22,  72,  118  sqq. 
Russia,  drink,  49. 

population,  33. 

revolution,  154. 


Sabotage,  146. 
St.  Simon,  157. 
Science,  use  of,  104. 
Scientific  management,  55. 
Scottish     Co-operative     Society, 

181. 
Self-expression  in  work,  14. 
Self-government     in     workshop, 

246. 
Selfridge,  Gordon,  247. 
Self-sacrifice,  232. 
Shaftesbury,  Lord,  117. 
Shop  piece-work,  251,  264. 
Simplicity  of  life,  68,  74. 
Skill  as  basis  of  value,  123. 
Skilled  workers,  284. 
Slavery,  industrial,  204. 
Smith,  Adam,  in,  134. 
Socialism,  156  sqq. 

advantages,  165. 

and  Co-operative  method,  174. 

a  result  of  the  war,  185. 

criticised,  211  sqq.,  280. 

justified  in  part,  237,  259. 

life  under,  230. 
Socialism,    Guild,    see    Guild 

Socialism. 
Spain  and  gold,  8. 
Spartans,  231. 
State  and  individual,  217,  274. 

bounties,  240. 

interferences,  239,  243. 

identical  with  people,  200. 
Statute  of  apprentices,  133. 
Stephenson,    Robert    Louis,  268, 

286. 
Stockholm,  159. 
Strike,  132,  239. 

against  Socialist    Government, 
167. 

Dock,  135. 

in  1912, 151. 

Railway,  197,  245. 
Supply  and  demand.  83,  276. 

criticised  by  Ruskin,  120. 
Syndicalism,  132,  197. 

advantages,  222. 

justified  in  part,  237.  25<). 
Syndicat,  132. 

Sweden,      employers      and      em- 
ployees, 139. 


294 


INDEX 


Swift,  Dean,  33. 

Tafi  Vale  decision,  137. 
Taylor,  James,  55. 
Telegraphs,  238. 
Telephone,  162,  168. 
Temperance,  283. 
Thrift,  172. 

Times,  quoted,  143,  194. 
Trades     Unions,    see    Unions 

Congress,  150. 
Trusts,  92. 

Unearned  increment,  97. 
Unemployment,  108. 

benefit,  191. 
Unions,    Trades,     amalgamation, 
140. 

disadvantages,  144. 

membership,  135,  139. 

old  Unions,  134,  150. 

oppose  profit  sharing,  264. 

record  good  and  bad,  205. 
United  States,  see  America. 
Unproductive  labour,  49. 

Value,  money  as  a  basis,  81. 

skill  as  basis,  123. 

will  be  transformed,  285. 
Vodka,  49. 


Voters'    power   under   Socialism, 
167. 

Wages,  just,  87,  128. 

minimum,    125   sqq.,    145,   240. 

standardisation  of,  122,  215. 
Wallas,  Graham,  14. 
War  gives  power  to  workers,   153. 

wealth   of   rich   increased    by, 
184. 
Waste  of  effort,  56. 
Wealth  defined,  9. 

probable   increase    after    War, 

254- 
redistribution  of,  219,  233. 

Wells,  H.  G.,  59,  68,  193. 

Witley  Report,  245. 

Women  in  industry,  125. 

maintain    output    during    war, 
20. 
Work,    complexity    of    modern, 
21. 

love  of,  13. 

manual,  15. 

necessary  to  production,  11. 

right  to,  12. 

unproductive,    and   productive, 

47- 
Workers,  see  Labour. 

Educational    Association,     73. 

Zimmern,  A.  E.,  69. 


Headley  Brothers,  Printers,  18,  Devonshire  Sti  eel    E.C.2     and  AsiiforJ,  Kent. 


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